Peter Politis at $20 Billion Greybrook Speaks to GowerCrowd

If you want to know how a company with 8,000 investors raises enough capital to fund $20 billion in development projects, then this week’s podcast with Peter Politis, CEO of Greybrook Realty Partners, is for you.

Listen to or watch the podcast here.

In this conversation you will hear the ‘Cliff’s notes’ of best practices for how to operate a real estate crowdfunding company as Peter reveals actionable guidance and insights based on their lengthy history of success.

In another update, there’s a source of great content relating to commercial real estate you should check out. It is the brand new video channel my friend Steve Bloom over at RenTVReview has built.

He’s been assembling videos from across the industry and I have lobbed up a few of my own to share with you.

Access the GowerCrowd RenTVReview channel here and then tour his site – there is a LOT of video content over there all related to CRE.

News and commentary from the past week follow.

The real estate crowdfunding world hums along as we approach the end of September and inch toward the end of Q3 and into Q4. This week, we’ve got several interesting deals, including CrowdStreet’s Sunbelt Multifamily GP Fund which offers the potential for outsized returns through general partner investment position 30% promote participation.

We’re also following regulatory developments in the space, with the SEC obtaining judgments on and bringing charges against bad actors involved in real estate crowdfunding. In addition, we’re going to take a look at a few new partnerships and app launches within the wide world of real estate crowdfunding.

New Crowdfunding Platform Deals

CrowdStreet’s Sunbelt Multifamily GP Fund aims to target core-plus and value-add multifamily acquisitions across the U.S. Sunbelt region. Investors in the Sunbelt Multifamily GP Fund will receive 30% of the general partner promoted generated by any properties held within the fund, which compares favorably to a traditional Limited Partner investment. The sponsor, Frankforter Group, has outperformed internal projections for numerous value-add multifamily assets in the South and Southeast, including assets in Alabama, Florida, and North Carolina. Realized IRRs on eight different dispositions have ranged from 18%-30%, in addition to cash-on-cash figures in the double digits. Check out their current raise here, on Crowdstreet.

Also on offer at CrowdStreet is the Village East Shopping Center, a high-volume specialty grocer and national retailer-anchored shopping center in Salem, Oregon. This property is in the process of being acquired at a 47.6% discount to estimated replacement cost in Oregon’s fast-growing capital city. CrowdStreet is hosting a live webinar and Q&A session on Thursday, September 30 at 10:00 AM PST so check it out if you’re interested, or just head over to the sponsor page on CrowdStreet.

General Crowdfunding Industry News

It’s been a busy week on the regulatory front. The SEC won a major victory in a case brought against a Virginia developer accused of co-mingling, mismanaging, and siphoning investor funds solicited via regulation crowdfunding. Todd Elliott Hitt was found liable for more than $15 million in disgorgement and prejudgment interest by the United States District Court for the Eastern District of Virginia. According to the SEC complaint, Hitt raised $2.5 million in investor funds for a relief defendant entity he managed, as well as misappropriated roughly $1.25 million from that deal.

The SEC also charged three individuals with the fraudulent sale of $2 million in unregistered securities via crowdfunding offerings as well as the CEO of the crowdfunding platform they used, Vincent Petrescu of TruCrowd Inc. According to the complaint, Robert Shumake, Nicole Birch, and Willard Jackson solicited investor funds for cannabis companies Transatlantic Real Estate, LLC and 420 Real Estate, LLC and misappropriated funds for their own use rather than the purported purpose listed in the offering. TruCrowd’S CEO, Petrescu, is accused of failing to properly vet the listings as well as failure to see the red flags brought up by one participant’s previous criminal history. Read more about this story on GowerCrowd, here or get the dish straight from the horse’s mouth at the SEC website.

Crowdfunding Platform Updates

It’s 2021, so it’s not exactly a surprise to find companies, and crowdfunding platforms, driving towards digital solutions for fundraising, investor outreach, information distribution, and other key functions inherent to regulation crowdfunding. Still, it’s nice to keep abreast of new developments, particularly those that represent a significant change in the way certain platforms do business.

In the “City by the Bay,” San Francisco, California, Juniper Square, a leading provider of commercial real estate investment management solutions recently announced the formation of a strategic partnership with CrowdStreet. The two firms intend to create an industry-first integration that will create efficiencies within investment management, primarily by synchronizing offering, investor and distribution information between the CrowdStreet Marketplace and Juniper Square.

Customers that utilize both services may benefit from streamlined management of investor information associated with capital raised through the CrowdStreet Marketplace through the use of end-to-end workflow within Juniper Square. Investor subscriptions and offerings will be shared between the companies, and sponsors will have the ability to originate unique investor materials like notices, performance data, and distributions directly through Juniper Square for publishing in the CrowdStreet Marketplace. Check out the press release here.

CrowdStreet isn’t the only platform to change their game- real estate investment platform GROUNDFLOOR recently announced a new app “The Stairs,” which purports to combine saving and investing in a new (quite corporate buzzwordy) term, “savesting.” This app, which investors and savers can access via the Google Play and Apple iOS stores, gives users the chance to earn 4-6% annualized interest with deposits, substantially higher than most savings accounts.

The app, which is currently in beta, is host to 2700 investors with $4.5 million dedicated to the app. All interest accrues daily and repays every five days. Funds held within the Stairs App are backed by a pool of loans for real estate assets- with the ease and liquidity of a traditional savings account. Additionally, entry fees for this product are significantly lower than most real estate crowdfunding offerings- users can invest as little as 1 dollar. To learn more about this interesting new offering from GROUNDFLOOR check out this article at Crowdfund Insider.

Well, that about sums it up for this week- but don’t fret- we’ll be back next week with more of the GowerCrowd Real Estate Crowdfunding Newsletter.

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