CMB MAGAZINE cmba-achc.ca winter 2016 | 33
crowdfunding
WHILE REAL ESTATE CROWDFUNDING is new to our country,
it has been picking up momentum in the U.S. and other markets for
almost three years. In 2015, there was approximately $3 billion raised
through private capital markets by real estate crowdfunding portals.
"Crowd" in this space refers to not only retail investors but also high-
net-worth institutional and foreign investors.
e idea behind real estate crowdfunding is essentially to
democratize access of good quality commercial property ownership to
the masses. Commercial property investments, historically, have only
been available to a select few who are in the inner circle (i.e., known to
the property owners). Moreover, oentimes such investors have to bring
big cheques to the deal, otherwise they are not welcome. Crowdfunding
opens up the door for smaller investment amounts.
How It Works
While stock markets have been known for their volatility, investments
into commercial property through direct limited partnership investments
via crowdfunding portals can shield an investor from the vagaries of capital
market volatility while at the same time providing average stable returns of
8 to 12 per cent. Here are the top five reasons why:
1 BRICKS AND MORTAR: Commercial property investments via
crowdfunding are secured by underlying real estate, unlike most of the
securities, which have intangible assets underneath them. If you invest
in a plaza, you can always go drive by and see how many cars are there
in the parking lot on any given day!
BY AMAR NIJAR, R2 CROWD
PRESIDENT & CEO
CROWD
the
Following
Infographic: Jiddu Rivadeneira
Real estate crowdfunding
comes to Canada
