Commercial real estate crowdfunding platform crowd street has completed its own funding round, raising $43 million in new equity from industry heavyweights.
Nuveen’s parent insurance company, TIAA, participated in the round through its new TIAA Ventures division.previous investor Grotech VenturesRally Ventures, Seven Peaks Ventures and Green Visor Capital also participated in the latest funding.
CrowdStreet allows small investors to fund commercial real estate developments and investments through online crowdfunding.
“What we have changed is that we have brought the traditional syndication model of raising capital through institutional investors, ultra-high net worth individuals and family office funds to an online paradigm.” -Founder Tresteen told the Commercial Observer. “In doing so, we have opened up a new source of financing for commercial real estate developers and operators for retail investors who could not have accessed an offline, more restricted access model.”
Since its inception, the company has invested more than $3.6 billion in its platform, including a record $1.2 billion last year, according to the release. The company’s investments generated an average internal rate of return of 17.5%, the company said in a statement. This year, CrowdStreet launched its own flagship non-trading REIT, CrowdStreet REIT I Inc.
As the company seeks to expand its product and service offerings, it plans to use the equity and debt capital from this latest funding round to scale up its growth. The company can also expand into wealth management with financial advisors helping clients add commercial real estate to their investment portfolios.
“Over the years, we have seen CrowdStreet evolve their fintech platform to better serve their real estate project sponsors and investor community.” Nuveen Shawn Lese, Chief Investment Officer and Head of Real Estate Fund Management for the Americas, said in a statement: “CrowdStreet’s innovations modernize, simplify and streamline access to commercial real estate, enabling more investors to reap the benefits of investing in this asset class.”
Crowdfunding for commercial real estate investments has been met with skepticism. before the pandemic experts warned This model may not survive a severe recession.
But last year, amid a bullish stock market, crowdfunding became more attractive to retail investors looking for another place to invest their cash, driving CrowdStreet’s biggest year ever and, like Jamestown legacy CRE companies launch a crowdfunding vehicle one’s own.
According to Crunchbase, CrowdStreet’s Series D funding brings the total funding to $67.9 million.