Earlier this month, Massolution, the sister company of crowdsourcing.org, announced the release of its comprehensive 2015CF-RE Crowdfunding for Real Estate report. The company is known as a leading research and advisory firm specializing in crowdsourcing and crowdfunding solutions for private, public and social enterprises. Even more so, the report provided by then gave us the first ever detailed look at the crowdfunding real estate industry.
Additionally, the 158-page report features data on the exponential growth of real estate crowdfunding, as well as the emergence of specialized real estate crowdfunding platforms. Lastly, it features how this revolutionary new method of real estate finance and investment is disrupting this class of assets.
Top Findings in Real Estate Crowdfunding Industry Report:
- Real estate crowdfunding grew 156% in 2014. With campaigns ranging in size from less than $100,000 to over $25 million, the industry broke the $1 billion mark.
- In 2014, North America stood as the largest region by funding volume. The accounted for 56% market share, compared with Europe at 42%.
- By 2015, Massolution forecasts that North America will retain its lead. Furthermore, they predict it to reach $1.4 billion in funding volume. On the other hand, Europe will have just broken the $1 billion threshold.
- Overall, real estate crowdfunding is expected to increase by 150%. This will equate to $2.57 billion in 2015. Thus, making it one of the fastest-growing industry segments of crowd capitalism.
- All in all, this year U.S. commercial and industrial property crowdfunding expects to see a 250% increase.
- Finally, the growing investor interest in crowdfunding platforms is proving crowdfunding to be a legitimate source of funds. This is especially true when compared to traditional banking.
“It appears that alternative finance platforms are here to stay and are starting to nibble away, albeit limitedly, at the regulated banking segment,” said Steven Cinelli, of Massolution. Additionally, he continues with, “Crowdfunding affords users and providers of new capital options. And with enabled technology and scale, such platforms will even offer traditional banks new ways to enhance their existing client relationships through partnering.”
Expanding Across Borders
Most notably, one of the new and exciting findings in the report is the development of cross-border deals. Even more so, is the expansion into other areas of the world. This is partly due to the emergence of global real estate platforms like Wealth Migrate. Due to this, there has been a dramatic increase in real estate crowdfunding. Moreover, it’s increasing in regions with markets large enough to potentially surpass the United States. Of course, both in terms of investors and available opportunities.
“The intersection of real estate and crowdfunding is enabling a huge leap within the industry away from the old property syndication model to new intermediate marketplaces, further proliferating this model around the world,” said Carl Esposti,CEO of Massolution.
Since crowdfunding platforms have turned their focus internationally, investors from around the world can get involved. Now, each has the chance to capitalize on opportunities across every continent.
“It is important to expand a real estate investment portfolio beyond your own backyard in order to access the global investment community for greater capacity, reduced risk and sustainable growth,” said Scott Picken, founder and CEO of Wealth Migrate.