Congratulations to Fundrise, Maketto and all of the investors who made this history-making commercial real estate crowdfunding project happen!

You can find the original post on the Fundrise blog.


Posted in: Crowdfunding

The Number One Barrier To CRE Crowdfunding Success

by Bruce Kirsch on April 30, 2015

Over the course of the last several months, as I have watched more and more crowdfunding platforms launch and make new deals available, I kept wondering how the platforms can make the maximum impact on commercial real estate property liquidity.

Liquidity unlocks value, and the lack of liquidity of commercial real estate has always been a hindrance to the wider allocation of investment dollars into the sector, and thus to growth in property values.

What makes individual commercial real estate properties illiquid?

  1. Unique operating risks, which require intensive due diligence
  2. Mortgage loan documentation requirements
  3. Non-standardized financial reporting from property to property
  4. Lack of securitization
  5. Lack of investor capital

The one thing that CRE crowdfunding platforms can do to create the most possible liquidity is to…


As with many things these days, it’s not the lack of information that’s the problem, but the noise that results from way too much information, especially when data is not easily comparable from deal to deal.

The crowdfunding sites are scrambling right now to get deals up on their platforms at breakneck speed, and one of the results of that is non-uniformity of presentation across their listings. A prime example of this is the financial projections that are provided for deals. In one deal, you’ll download a PDF that looks like the source document was photocopied several hundred times and then scanned, and it’s 5 pages long. In another deal you’ll have a 10-page document that looks entirely different. And in a third listing there is yet another unique format and presentation to the projection.

This is a major problem for potential investors, who do not have a lot of time or energy to print out and compare three different formats to one another, normalize them to one another, and then analyze them and make a selection among them as to where they will put their money. How many part-time real estate investors have time and willingness to plug three unique deals into their own spreadsheet model and opine on which one is the best for them?

Word of this headache has gotten around in accredited investor circles, and it’s no surprise that under 5% of the few million accredited investors in the US have dipped their toe into a crowdfunded deal so far.

This hurts real estate liquidity.

To remedy this issue, we have created a simple way for the crowdfunding platforms to present all of their deal projections in a standardized, interactive manner. Check out the embedded iframe below (the width is limited to the format of the blog, so click on the View full analysis link at the bottom left to see the full presentation).

Platform-wide adoption of a standardized presentation such as this can make a big impact for the attractiveness of that platform, and in the long-run, deal liquidity.

Crowdfund platforms can request more information here.


David Todd | Vice President, US Retail Investments | Prudential Real Estate Investors

David Todd oversees US retail investments for Prudential Real Estate Investors.  Formerly he was with DDR Corp. (NYSE: DDR), and he is an REFM training alum.

How did you get started in the business?

Actually, by cold calling.  Out of undergrad I worked for a consulting firm, but got the real estate bug working on a small side project.  The more I think about it, I probably had the bug a long time ago as my dad is an architecture buff so I spent the better part of my childhood looking at, and discussing, buildings with him.  However, this little deal helped me realize the potential financial benefits, so I guess the merger of a hobby and, um, greed?  At any rate, I was hooked but didn’t have an obvious entry point into the business so would call people I saw in the paper that were working on interesting projects and ask for an informational interview – that type of thing.  After many many calls and meetings I ended up landing a great development gig with Gary Rappaport’s shop in DC.  Took me over a year.

What do you love the most about it?

The tangible nature.  The fact that what we do, hopefully well, impacts the daily lives of so many people for a long time. The convergence of multiple variables, be it employment growth, demographic changes, shopping trends – whatever – and how those factor into investment decisions.  I also appreciate the measurable nature of the business.  By that I mean you’re going to make a lot of assumptions when you underwrite an asset, and one day you’ll sell the building and see how you did.  This isn’t exclusive to real estate, but perhaps a little easier to comprehend.

What projects are you working on right now? 

My main job is to do retail real estate acquisitions, for all types of investment strategies, across the US.  Considering where we are in the cycle it’s busy out there.  We just finished a few large core buys, where we love the real estate and the future of the assets.  Also we are working on a couple infill developments that will be fantastic when complete, and what a ride to the finish.

What’s the most challenging thing about your job?

Time management for sure.  You have to look at so many deals to find a winner and you constantly have to be on the lookout for an edge.  And with the wife, kids, travel…lots of travel, it’s hard to find time for everything.  And more importantly, time to do everything to the level you expect of yourself.

What is your dream project to work on? Why?

I’m definitely drawn to larger deals, so I’ll go with the purchase and overhaul of a substantial portfolio.  The complexity is fascinating.

Any words of wisdom for young folks looking to get started in the business?

Hustle.  The real estate industry is clubby so you’re going to have to work hard and get creative.  Do things like joining a group such as ULI, network your face off, shadow someone for experience – whatever it takes.  And while you didn’t even hint at a plug, so I’m being completely serious here, take some REFM classes and put them on your resume.  That will show passion for the industry and the ability to offer an employer a skill on day one.  Starting out, no one will expect you to forecast rents for them, but they will want you to be able to build a dynamic financial model.  You can utilize that skill to earn your keep while you’re learning the rest through osmosis.  I’m a model snob so this might be more important to me than others, but I suppose my bigger message is you need to be able to offer someone something useful to their own goals, and you need to demonstrate a true desire for the business.

What’s your favorite building? Why?

This is probably the toughest question you asked.  As mentioned earlier I’ve seen a lot and have many found memories – Fallingwater, Burruss Hall, Sagrada Familia, the Hemingway House where I got married, 8 Spruce – but if I had to pick one, I’d go the symbolism route and say the Jefferson Hotel.  Because, well first off, it’s beautiful, but it also reminds me of my hometown Richmond, VA.  Plus, Thomas Jefferson is the man.