Will Crowdfunding for Commercial Real Estate Ever Catch On?

It was all the rage in 2018. It picked up more steam during the pandemic, reaching new frothy heights. New commercial real estate crowdfunding platforms were popping up one after the other in a bid to finance all sorts of transactions. The thought was that by pooling money through small monetary investments from the average Joe or Jane via online portals, this technology could bring commercial real estate to the mainstream investor. Minimum required investments were as low as $100 or sometimes even less. Finally, the mass democratization of commercial real estate appeared to be within reach. The Jumpstart Our Business Startups (JOBS) Act of 2012 paved the way by allowing non-accredited investors to participate in crowdfunding. New firms, some of which did require individual investors to be accredited, came on the scene right away, with RealtyMogul and Fundrise leading the way with 2012 debuts right on the heels of the establishment of the JOBS Act. RealtyMogul is one of the standout success stories, as it has reeled in more than $1 billion on its platform. Fundrise, on the other hand, has gotten out of the crowdfunding game, as have many, many others.

The crowdfunding market for commercial real estate continues to grow in the United States, reaching an estimated value of $11.5 billion in 2022, according to Vantage Market Research. “More and more investors are aware that they can invest in high-quality real estate online and build a diversified portfolio from the comfort of their own home,” said Jilliene Helman,

Read more at Propmodo.

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