ST. LOUIS—The popularity of crowdfunding has soared in the commercial real estate world, and some heavy hitters from the service side of the industry have decided to get involved. Earlier this week, a team that helped build St. Louis-based broker Cassidy Turley into a national firm launched Selequity, an online platform for accredited investors that want to invest in commercial real estate projects.
The launch was announced at the TechCrunch Disrupt 2015 conference in New York City by AJ Chivetta, chief executive officer of Selequity and a partner with Armstrong Teasdale LLP, a member of the Cassidy Turley legal team. Other Selequity founders include: Mark Burkhart, former chief executive officer of Cassidy Turley; Bill Florent, former chief financial officer of Cassidy Turley; as well as Maria Desloge of Armstrong Teasdale.
“This is a platform for people who want to raise capital for projects that they want to continue to run and control,” Chivetta tells GlobeSt.com, rather than funding acquisitions or new development. “It's not that we won't do that at some point,” but as the team gets the platform up and running, it will concentrate on serving property owners looking to get some liquidity in a fast and efficient way.
Selequity will handle projects from across the nation with values roughly between $2.5 million and $20 million, Chivetta adds, and will help owners raise between $1 million and $5 million. “We've had a great amount of traffic on the site since we launched on Monday and we will be adding projects in the next couple of weeks.”
For those real estate professionals who are still uncertain about the use of crowdfunding websites, Chivetta says it's helpful to consider how unusual REITs seemed when they were first allowed. And without the technology that has fueled the development of crowdfunding, “ordinary investors don't have opportunities to easily invest in real estate. It's been a historic problem.”
For that reason, he adds, “we think crowdfunding is going to grow exponentially in the next few years.” In 2014, such platforms raised about $1 billion for commercial real estate, he points out, and this year experts predict that number will hit $2.5 billion.
Selequity officials plan on doing several projects a month during their ramp-up phase, with the ultimate goal of handling about 100 projects per year.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
