After shattering barriers by raising $1.2B from retail investors in 2021 and experiencing even greater growth in 2022, online property investing platform CrowdStreet expands to develop vanguard tech-enabled features to meet growing investor demand.
AUSTIN, Texas, June 28, 2022 /PRNewswire/ -- As individual investors increasingly turn to private equity commercial real estate to find a haven from market volatility, CrowdStreet—the nation's largest online private equity real estate investing platform*—is expanding access for this accelerating wave of retail investors. To lead vanguard changes to its user experience, offerings, performance, and value, CrowdStreet has hired two visionary executives with deep fintech and marketplace experience: John Farda as chief product officer and Scott Mackley as president of marketplace business.
Today as stocks and bonds stumble due to inflation, rising interest rates, war, and unrest, private equity commercial and multifamily real estate deals continue to help investors build and preserve wealth. In its 2022 Investor Benchmark Survey, CrowdStreet found 98% of respondents plan to make at least one private equity real estate investment in 2022, while 65% plan to invest less in stocks and bonds.
Substantiating this trend, last year CrowdStreet saw its largest investment year since its 2014 inception—$1.2 billion invested by retail investors—and this year has topped over 100 realized deals. Its private real estate offerings allow individuals to help diversify their portfolios with private commercial and multifamily real estate deals that might otherwise be available only to institutional investors and other insiders.
Further proof that investors have come to see private equity real estate as an advantageous investment in uncertain times has been CrowdStreet's deal velocity: since 2014, it has closed more than 645 online real estate syndication deals, with 115 of them fully realized as of May 2022.
"We were innovators when we brought CrowdStreet's online marketplace to retail investors. No one else was offering the same breadth and depth of meticulously evaluated deals for all property types—multifamily, office, hotel, industrial and more. But to meet increased investor demand for strong private real estate opportunities, it's critical to keep developing and implementing groundbreaking, state-of-the-art products and solutions," Cofounder and CEO Tore Steen said. "Given their past accomplishments at innovating fintech and marketplace businesses, John Farda and Scott Mackley will help us continually evolve our investor and sponsor experience with our platform."
John Farda will refine and expand CrowdStreet's flagship investment platform
Incoming Chief Product Officer John Farda is charged with demystifying, streamlining, and elevating the commercial real estate investing experience for individual investors, whether they are self-directed or prefer some level of guidance. He builds on his experience driving transformation and growth at some of the financial industry's best-known companies.
Most recently, Farda was managing director of North America for global foreign exchange trading platform OANDA, where he headed growth in the United States and Canada. Before that, he was an executive at Fidelity Investments and at E*TRADE, spearheading the development and optimization of fintech products for both of those market leaders.
Farda will concentrate his team's efforts on CrowdStreet's tech-enabled Marketplace, the online platform that allows investors to filter and research commercial real estate deals offered from real estate sponsors. As a two-sided Marketplace that supports both investors and real estate sponsors, the goal is to refine and expand the products and processes and make it easier and more effective for both stakeholders.
"Investors increasingly demand an easy-to-use platform that provides the widest range of tech-enabled commercial real estate investment options. We're already known as an industry leader in providing this experience, but as new technologies emerge, we see so many ways to tap into them and broaden the potential and options for investors," Steen said. "That's why we're looking to John. He's blazed these trails before at E*TRADE, Fidelity, and OANDA. He has the know-how and creativity to develop and implement advances that will change the way sponsors structure deals and individuals invest in real estate."
"I've spent most of my career helping retail clients participate in the markets. Since sponsors are as critical to this equation as investors, I see my work at CrowdStreet as the next phase of that, which will mean anticipating needs and simplifying the journey for both groups," Farda said. "We're going to make it easier for more investors to understand the benefits of having commercial real estate in their portfolios, and to streamline the investing process for sponsors."
Scott Mackley will provide unified and focused leadership as CrowdStreet grows
Incoming President, Marketplace Business Scott Mackley will head up capital markets, investments, strategic partnerships, marketplace operations, investor relations and internal sales. He brings more than 25 years of financial industry experience with QuinStreet, Citigroup, and Salomon Brothers and years of success consulting for high growth fintech firms at similar stages and with analogous opportunities.
Mackley will oversee all aspects of CrowdStreet's private equity commercial real estate deals, from prospecting and sourcing deals to preparing them for launch on the Marketplace to supporting fundraising. Post-funding, his team will oversee performance management and investor management. Private real estate deals usually stretch over several years, from pitch to payout, so leadership must be both high-level and granular. "Building a successful marketplace," Mackley pointed out, "requires focusing over time on the success of both sides of the market, the sponsors and the investors."
"CrowdStreet is already a market leader that focuses on providing the highest quality deals. But to realize the potential of our industry, we need to reach investors who should have commercial real estate in their portfolios but don't understand the investment or know how to find and get the best products possible for their needs and investment goals," CEO Steen said.
"We're creating options in our Marketplace so people can find investment opportunities that truly meet their needs and get in and out of them with speed and ease if they need or want to," he added. "And Scott, who has built multiple-hundred-million-dollar marketplace businesses, has the expertise and acumen to help us maximize that potential."
Mackley said he was drawn to CrowdStreet because his experience has shown him the potential for tech-enabled businesses to disrupt legacy industries. "Commercial real estate investing continues to take an old school approach," he said, "but CrowdStreet's innovation is modernizing and democratizing the industry so more investors can reap the wealth-building benefits of this asset class."
New hires support CrowdStreet's push to prepare for the future of investor adoption
Farda and Mackley bring cutting-edge ideas and frontline experience to a team of innovators already dedicated to building the best possible fintech platform for private equity real estate investing. Their addition comes at a time when forecasts predict continued instability for the stock market. Yet commercial and multifamily real estate are emerging as an asset class that is relatively shielded from market volatility. With these two new leaders, CrowdStreet will be able to help accredited investors understand how adding private equity real estate to their portfolios can help them build and preserve wealth.
About CrowdStreet: Since 2014, CrowdStreet has launched more than 645 private equity real estate investment opportunities across the U.S. Our investor community has committed more than $3 billion in investment dollars, including more than $1.2 billion of equity in 2021 alone. Based on the performance of CrowdStreet's 115 fully realized deals, the investment opportunities on the platform have realized an averaged 17.7% IRR. Some of the world's largest sponsors have used CrowdStreet to raise capital. CrowdStreet has consistently been named Best Overall Real Estate Crowdfunding Site by Investopedia. Most recently, it was named a Benzinga 2022 Alternative Investments Listmaker and recognized as one of America's Best Startup Employers 2022 by Forbes and Statista. Learn more at www.crowdstreet.com
*As reported by Dr. Adam Gower in Best Real Estate Syndication Platforms | Gower Crowd - UNLEASHED, published 2022, based on dollars raised by individual investors.
We calculate IRR, or Internal Return of Return, for individual realized deals based on the aggregate investor cash flows, utilizing the XIRR function in Microsoft Excel and with reference to the effective capital contribution dates of each individual investor and the distribution dates by the issuer. The aggregate IRR of all realized deals is based on aggregated cash flows of individual realized deals, as described above, and similarly calculated utilizing the XIRR function. IRR figures listed on this page are net of the most onerous fees charged to clients of CrowdStreet Advisors, LLC, our registered investment advisor subsidiary; an investor's actual IRR on a realized investment may differ. We utilize a consistent methodology for calculating returns. However, in most cases, the applicable issuing entity provides the distribution information used for our IRR calculations. While we take reasonable steps to verify this information, we cannot guarantee its accuracy.
Investing in commercial real estate entails substantive risk. You should not invest unless you can sustain the risk of loss of capital, including the risk of total loss of capital. All investors should consider their individual factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. Direct and indirect purchase of real property involves significant risks, including without limitation market risks, risks related to the sale of land and risks specific to a given property, which could include the potential for property value loss, potential for foreclosure, changes in tax status and fees, and costs and expenses associated with management of such properties. All investors should consider risks specific to that given property prior to investing.
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