CrowdStreet, an online marketplace for direct equity investment in U.S. commercial real estate, is now raising $25 million for the company’s first CrowdStreet Blended Portfolio investment offering. To provide individual investors and registered investment advisors another way to diversify their investments with commercial real estate, the company plans a series of diversified and specialty portfolio investment options that will collectively raise and invest up to $170 million.
The first CrowdStreet Blended Portfolio’s proceeds will be deployed across 30-50 pre-vetted projects on the CrowdStreet marketplace, representing a broad range of commercial and multifamily asset types, risk profiles and geographies.
“Our investors have seen incredible returns on our marketplace, and we’re now opening up this asset class to new people with unprecedented simplicity and transparency,” said Tore Steen, CrowdStreet CEO. “Undertaking your own due diligence as a first time real estate investor can be daunting. Even for those familiar with the market, the race to review and invest across so many deals can be hard. Our new Blended Portfolio brings further simplicity, and investors and their advisors can access a wide range of pre-vetted and sought-after CrowdStreet marketplace offerings without the need to review and invest on an individual property basis. It’s diversification with one click at a low cost.”
The CrowdStreet Blended Portfolio simplifies investing in commercial real estate and opens the door for more people to access the market with diversification, which minimizes risk. The Blended Portfolio is a direct response to identified needs from both existing and prospective investors, as well as registered investment advisors who recommend that clients allocate a portion of their assets to institutional-quality commercial real estate.
More than 100,000 investors and more than 250 real estate operators and developers are on the CrowdStreet platform. Since inception, more than $8.5 billion of commercial and multifamily properties have been listed on the CrowdStreet marketplace, which makes private equity real estate investing accessible to millions of people.
CrowdStreet focuses on the so-called “middle market” of properties valued between $15 million and $50 million, a market underserved by large financial institutions, which helps create robust opportunities for private investors to fill equity gaps with the potential for above-average risk-adjusted returns. Since inception, fully realized offerings on CrowdStreet have produced an average annualized return of 36.3% XIRR and a 1.6x equity multiple on a 1.9-year holding period.
“The benefits of the new Blended Portfolio series extend to both sides of our marketplace, as the demand for diversified investment products is expected to raise more capital on the CrowdStreet platform, helping sponsors hit targets sooner and with greater certainty,” Mr. Steen added. “ Removing friction from individual investors seeking diversification and from project sponsors seeking capital will accelerate growth of the marketplace as investors and sponsors build wealth together at a time when diversification is especially important.”
Fast Facts on CrowdStreet Blended Portfolio 1, Series I
● Capitalization: Up to $25 million
● Individual Asset Value: Properties between $15 million and $50 million
● Strategy: Blended portfolio of up to 50 offerings on the CrowdStreet marketplace
● Risk Profile: Core, Core Plus, Value-Add, and Opportunistic
● Geography: Mainly secondary markets across U.S.
● Target investment period: 5-10 years
● Target IRR: 16%-18%
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