Our opinion: Given the complexity that usually comes with buying commercial property, what CrowdStreet has to offer is relatively easy to sell: sign up for free and find the right one or a bundle of dozens of offers from the comfort of your couch.
- Product variety
How did we calculate that?
- Registration is free for those who qualify.
- A variety of offers for an online marketplace
- Maintains and provides access to a wide variety of commercial spaces including apartment buildings, self storage, and data centers
- Sponsors bringing commercial deals to CrowdStreet’s marketplace are carefully screened so investors can have a high level of confidence in the people they do business with.
- CrowdStreet only serves accredited investors, which means you must already have a certain amount of assets.
- Most of the projects on CrowdStreet’s marketplace have a minimum entry point of $ 25,000.
- CrowdStreet is limited to commercial real estate investments, which potentially means fewer projects than an investor with a portfolio that combines residential and commercial real estate projects, for example.
What is CrowdStreet?
CrowdStreet is a way to invest in commercial real estate without buying a building yourself. It is able to turn a single investor into a kind of co-landlord and provide access to a real estate market that otherwise few would have access to.
The founders of CrowdStreet came up with the idea after the Great Recession showed how many investment portfolios were vulnerable due to an over-reliance on Wall Street stocks and other investment vehicles. They decided that more people needed an accessible way to diversify their holdings through accessing the real estate market, and they saw a way to do that through crowdfunding.
Who is it best for?
If you’re an investor with a decent amount of assets, CrowdStreet has a number of commercial real estate listings for you. You can register for free and start window shopping for all types of commercial space. When you find a project you like and you agree to the sponsor’s terms, you can sign the papers and get a share in a property.
CrowdStreet is best suited for wealthier investors who have an interest in commercial real estate. Investors must have an investment company such as a limited liability company or LLC in order to use the service.
CrowdStreet acquires commercial real estate projects and offers qualified investors the opportunity to buy into them.
Single projects or single sponsor funds come with a professional real estate manager. When an investor identifies a deal and a sponsor of interest, the legal documents can be signed online. These projects can target a geographic location and / or an asset class such as an office or apartment building.
Good to know
An investor can also opt for a diversified CrowedStreet fund that casts a wide web over real estate and sponsorships, giving investors the option to access a range of deals.
CrowdStreet also offers a range of information on investing in the commercial real estate market, starting with videos on each potential project to be won on the site’s marketplace. In addition, there is plenty of general information on the latest happenings in the commercial real estate market and the details, from basic to advanced, to help you make commercial real estate decisions.
Is CrowdStreet Right For You?
If you have enough assets to qualify as an Accredited Investor and enough cash to meet the minimum investment required for a deal on CrowdStreet, you can take advantage of what CrowdStreet has to offer. CrowdStreet does the commercial property purchase for you, giving you an unprecedented opportunity to compare terms and conditions, evaluate new opportunities and expand your portfolio.
If you are a non-accredited investor, you still have options. You can choose to forward funds to a real estate investment trust at a much lower cost of entry than CrowdStreet charges.
It is difficult to see how the commercial real estate market could change after the pandemic. It is already clear that many companies are allowing more remote working, which could affect supply and demand and change building prices.
For some, an open door to commercial real estate
The idea of bringing small to medium-sized commercial real estate transactions to the doorstep of investors who otherwise might not feel able to search for them seems like a concept with staying power.
Real estate does not liquidate quickly, so it should be viewed as a long-term investment so getting your money back in the short term can be difficult.
CrowdStreet seems to be on the right track with its intent to expand its offering to everyone and we hope that it will happen sooner or later. Real estate investments can be used to protect against inflation and stock market turmoil, so diversifying your portfolio of real estate assets is generally a good guide.
Although no one knows what the commercial real estate market will look like after COVID-19, there will always be a need for commercial space – and thus an ubiquitous investment opportunity.
Here are the answers to some of the most frequently asked questions about CrowdStreet.
- Does CrowdStreet have plans to serve non-accredited investors?
- For the time being yes. There are currently no such options, but CrowdStreet hopes to offer its service to non-accredited investors at some point.
- What is the minimum investment required to access a project on CrowdStreet?
- Most projects have a minimum investment of $ 25,000, but the choice of entry points can go up to $ 100,000.
- How are the sponsors bringing deals to CrowdStreet checked?
- The process that CrowdStreet uses to evaluate potential projects before they are available on its online marketplace takes 26 factors into account.
- What does it mean that I need an investing company?
- An investing company provides information about who an investor is: whether they are investing alone or with a spouse or business partner, or whether they are investing as part of an escrow or self-managed individual retirement account.
- Is CrowdStreet a real estate fund?
- No. CrowdStreet offers individual investors and small to medium-sized companies direct access to commercial real estate projects.
- Does CrowdStreet charge any fees?
- No. Qualified investors can join CrowdStreet and search for investment opportunities for free.
- Do sponsors charge fees on CrowdStreet?
- Yes, possibly. CrowdStreet requires sponsors to list all fees on a dedicated tab within the listing details so investors know ahead of time what to expect.
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About the author
Kelli Francis is a writer and content strategist. She began her career with a degree in journalism from the University of Oregon and then worked in some of the busiest newsrooms in the business, from The Seattle Times to MSN.com, WebMD and Yahoo. For nearly a decade at Yahoo, she was Assistant Managing Editor at Yahoo Finance specializing in personal finance content; a producer for Yahoo News; and a senior editor on the Yahoo! Homepage team. Kelli has been a perennial seeker and is currently expanding her knowledge of finance as a student at the American College of Financial Services. She is also the very proud mother of a wonderful and unstoppable 7 year old with Autism Spectrum Disorder.