By
the
Numbers
$10 billion Total funds projected to be raised
in 2014 globally by all types of crowdfunding platforms, not limited to real estate. That’s nearly seven times the $1.5 billion raised in 2011.
Crunching the numbers on crowdfunding A look at the rise of the fundraising platforms helping to bankroll projects from New York to Nevada
T
New To market
CityShares, a startup that aims to invest in gentrifying NYC neighborhoods. It’s first planning to raise $5 million to buy properties in Bedford-Stuyvesant, then will buy up to $20 million in Harlem.
12% Portion of the total $313 million poured $5,000 into all crowdfunded investments in the Minimum investment Fundrise U.S. from September 2013 through June that went to real estate. Development companies raised $10 million, while real estate investment firms pulled in nearly $24 million. Only the energy sector has raised more.
accepted toward its $1 million fundraising goal to build a 3,500 square-foot home in the Hamptons. The projected annual return on the project, which was fully funded, was 10.5 percent, or $525 on the minimum investment.
70 Total number of real-estate companies
using crowdsourcing to solicit investors, out of more than 4,300 crowdfunding companies overall. Real estate crowdfunding has a 39 percent success rate meeting funding targets, versus 18 percent for all crowdfunding.
$200,000 Annual income required to be certified
he growth of real estate crowdfunding platforms on the Internet in the last year has given developers the ability to appeal to the public to help bankroll their projects, rather than relying solely on traditional investors. In New York City, crowdfunding platforms have raised millions for projects that run the gamut from Prodigy Network’s purchase of an extended-stay hotel on East 46th Street to Fundrise’s renovation of an East Village mixed-use building. Even the venerable Carlton Group has launched a crowdfunding platform. Those running crowdfunding sites, which in some cases allow investors to get a piece of the action for as little as $100, say the model democratizes real estate investments. While much is still being hammered out and returns for investors vary, growth has been explosive, and is expected to continue. Read on for a look at how much the sector has taken off. Fundrise’s East Village renovation By Brendan O’Connor
12% Annual return for investors targeted by
an “accredited” investor. The Jumpstart Our Business Startups Act of 2012 opened up crowdfunding by allowing unaccredited investors to invest up to $2,000 a year, or 5 percent of their income or net worth, into closely held companies regardless of income.
$70 million Equity raised by Prodigy Networks
for New York projects through crowdfunding. Prodigy has completed three crowdfunded acquisitions in NYC and six overall.
$25 million Portion of the $85 million purchase price Prodigy raised for its project 17John through crowdfunding. The minimum investment was $50,000.
By the Numbers
The Dune Road home partially bankrolled by Fundrise.
$1 million Minimum investment accredited
investors can make on the Carlton Group’s crowdfunding platform. It is now accepting up to $30 million toward funding a $220 million development to be built through a joint venture “with a prominent Manhattan developer.”
32% Portion of investments in real estaterelated crowdfunding raised by companies run by woman. Overall, women-run companies account for 18% of real estate crowdfunding companies.
$75 Revenue per available room targeted
by the new hospitality crowdfunding site Hotel Innvestor. Average revpar in New York City hotels is about $243. Sources: UCLA Ziman Center for Real Estate, GlobeSt. com, Crowdnetic, the New York Times, Bloomberg News, Crowdfund Insider, Curbed, DNAinfo and TRD reporting.
3 East 77th Street, Apt. 8A | Offered at: $2,500,000
JEANNE H. BUCKNAm Associate Broker | 212.606.7717 | jeanne.bucknam@sothebyshomes.com NIKKI FIELD Senior Global Real Estate Advisor, Associate Broker | 212.606.7669 | nikki.field@sothebyshomes.com | www.nikkifield.com East Side Manhattan Brokerage | 38 East 61st Street, New York, NY 10065 Sotheby’s International Realty and the Sotheby’s International Realty logo are registered (or unregistered) service marks used with permission. Operated by Sotheby’s International Realty, Inc. 10-14-field.indd 1
28 October 2014 www.TheRealDeal.com
9/29/2014 4:55:49 PM