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Equity Office Daily Brief: September 20, 2016

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Daily Brief

September 20, 2016

  EquilityOffice

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Richard Leyner, Broker and Chamber Leader, Dies

San Fernando Valley Business Journal

 

J. Richard Leyner, executive vice president of Illi Commercial Real Estate in Encino and a longtime San Fernando Valley broker, passed away on Sept. 17, the Encino Chamber of Commerce announced Monday. He was 79. Leyner relocating from New Jersey to the...

 



BLOG & ONLINE NEWS

 

Douglas Emmett sells 14-story Sherman Oaks office building for $56.7M

The Real Deal

 

Los Angeles-based Sandstone Properties just bought a Class A office building in Sherman Oaks for $56.7 million, or $338 per square foot, from Douglas Emmett. At the time of the sale, the 14-story building at 14724 Ventura Boulevard, dubbed the Tower...

 


Depot At Santiago Coming To Santa Ana

Bisnow

 

The initial work is underway for the Depot at Santiago, which will be built on the proposed OC Streetcar line across the street from the Santa Ana Regional Transportation Center and at the corner of Santa Ana Boulevard and Santiago Avenue.The...

 


With default looming, Hines looks to sell Warner Center complex

The Real Deal

 

An affiliate of real estate giant Hines is looking to sell a corporate office park in Woodland Hills’ Warner Center amid speculation of an impending loan default, sources told The Real Deal.  Hines interests bought the property, known as LNR Warner Center, for...

 


Reimagining LA's shopping malls

The Real Deal

 

When The Grove opened in 2002, it was a breath of fresh air for Southern California shoppers — literally. After years of grand openings for enclosed, suburban-style malls, here was an open-air shopping center reminiscent of a theme park, with trolley...

 


8 Awesome, and Strange, Offices

Fox News

 

Since we spend so much time at the office, they shouldn’t just be for work. What about relaxing, working out, eating, even playing games? These are activities that should be done in offices as well -- or at least some companies...

 


Westwood Restructures $1B of Assets into Single Company

GlobeSt.com

 

LOS ANGELES—Westwood Financial Corp. has restructured the majority of its retail assets into a $1.2 billion company, consolidating 280 entities that covered a total of 77 assets into a  single company. The move streamlines management and will help to drive growth...

 


Crowdfunding Real Estate Commands Cautious Excitement

GlobeSt.com

 

LOS ANGELES—It is the shared economy, expanded. “The ubiquity of crowdfunding websites like GoFundMe and Kickstarter, coupled with Title III of the Jumpstart Our Business Startups (JOBS) Act going into effect earlier this year and opening up public, online crowd capitalism,...

 


Sears Begins New Wave of Kmart Closures

CoStar.com

 

Seritage Growth Properties, the REIT spinoff of some Sears Holdings' Sears and Kmart stores, announced late Friday that Sears has exercised its right to terminate 17 store leases. Though the stores were not identified in the securities filing, analysts at RBC...

 


Big Data Is A Big Deal For Real Estate

GlobeSt.com

 

Traditionally slow to adopt new concepts, the real estate industry is finally embracing technology and using it to leverage its power. One element of technology that has taken off like wildfire in the industry is big data, which can be defined...

 

FULL TEXT


Richard Leyner, Broker and Chamber Leader, Dies

San Fernando Valley Business Journal

 

J. Richard Leyner, executive vice president of Illi Commercial Real Estate in Encino and a longtime San Fernando Valley broker, passed away on Sept. 17, the Encino Chamber of Commerce announced Monday. He was 79.

Leyner relocating from New Jersey to the West Coast in 1978. After nearly a decade dealing in local residential and commercial real estate as the owner and operator of two Red Carpet Real Estate franchises, he joined Merrill Lynch Real Estate as vice president and branch manager of the Encino office and the Commercial Division. Prior to being appointed executive vice president of Illi in 2014, Leyner spent 23 years as the senior vice president of NAI Capital Real Estate in Encino.

Leyner held numerous leadership positions at Valley charities and business organizations. He was a past president of the Encino Chamber, former chairman of the United Chambers in the San Fernando Valley and the founding president of the Encino Neighborhood Council. At the time of his death he was serving as the director of finance for the United Chambers and the president of the Encino Business Improvement District, as well chairman emeritus of the Child Development Institute.

In 2005, he received the Fernando Award, an honor recognizing a lifetime of volunteerism in the San Fernando Valley.

Leyner is survived by his wife Barbara; their two daughters, Dori and Frances; his brother Joel; five grandchildren; and two great-grandchildren. Services will take place on Tuesday, Sept. 20 at 1 p.m. in the Eternal Light Chapel of Groman Eden Mortuary at 11500 Sepulveda Blvd. in Mission Hills. In lieu of flowers, the family has requested that donations be made in Leyner’s memory to CDI Kids-Child Development Institute or New Directions for Youth.

-Helen Floersh

Douglas Emmett sells 14-story Sherman Oaks office building for $56.7M

The Real Deal

 

Los Angeles-based Sandstone Properties just bought a Class A office building in Sherman Oaks for $56.7 million, or $338 per square foot, from Douglas Emmett.

At the time of the sale, the 14-story building at 14724 Ventura Boulevard, dubbed the Tower at Sherman Oaks, was 96 percent occupied, according to a release from Madison Partners. Its brokers Bob Safai, Matt Case and Brad Schlaak brokered the deal on behalf of both parties and arranged a $48.1 million Loancore Capital loan for Sandstone.

The 167,726-square-foot building was built in 1966 and most recently renovated in 1991.  Sandstone has definite plans to further improve the property, which will be a long-term hold, a source familiar with the transaction told The Real Deal. The buyer will court more creative-minded entertainment tenants as current leases expire, the source said. 

Sandstone owns a handful of commercial properties in Southern California, including the offices at at 11175 Santa Monica Boulevard.

“Sandstone will go into an extensive renovation and reposition ,” Safai told TRD. “It did the same for the Variety building in West L.A., completely changing the property — the glass and everything — and got it fully leased to 100 percent. I anticipate this will happen again.”

The office building had been under the Douglas Emmett umbrella since 1997, when Douglas Emmett & Co. bought it for $19.8 million, according to CoStar. Safai and Madison Partners’ Chris DuMont and Bob Pearson will be leasing the property going forward.

-Cathleen Chen

Depot At Santiago Coming To Santa Ana

Bisnow

 

The initial work is underway for the Depot at Santiago, which will be built on the proposed OC Streetcar line across the street from the Santa Ana Regional Transportation Center and at the corner of Santa Ana Boulevard and Santiago Avenue.The project is being developed by C&C Development and Orange Housing Development Corp, along with the City of Santa Ana.The 70-unit Depot at Santiago is designed for working families with incomes ranging from 30% to 60% of the area median income and those who have disabilities and special needs, according to GlobeSt.Funding is being provided by the Mental Health Services Act under the auspices of Orange County.The development will include around 8,500 SF of ground-level retail space with the retail building, including an outdoor plaza.There will also be 14 one-bedroom, 29 two-bedroom and 27 three-bedroom apartments with a 3k SF community room, a barbecue pavilion and a demonstration kitchen.

-Karen Jordan

The initial work is underway for the Depot at Santiago, which will be built on the proposed OC Streetcar line across the street from the Santa Ana Regional Transportation Center and at the corner of Santa Ana Boulevard and Santiago Avenue.The project is being developed by C&C Development and Orange Housing Development Corp, along with the City of Santa Ana.The 70-unit Depot at Santiago is designed for working families with incomes ranging from 30% to 60% of the area median income and those who have disabilities and special needs, according to GlobeSt.Funding is being provided by the Mental Health Services Act under the auspices of Orange County.The development will include around 8,500 SF of ground-level retail space with the retail building, including an outdoor plaza.There will also be 14 one-bedroom, 29 two-bedroom and 27 three-bedroom apartments with a 3k SF community room, a barbecue pavilion and a demonstration kitchen. Read more at: https://www.bisnow.com/orange-county/news/commercial-real-estate/depot-at-santiago-coming-to-santa-ana-65274?rt=26542?utm_source=CopyShare&utm_medium=Browser

With default looming, Hines looks to sell Warner Center complex

The Real Deal

 

An affiliate of real estate giant Hines is looking to sell a corporate office park in Woodland Hills’ Warner Center amid speculation of an impending loan default, sources told The Real Deal. 

Hines interests bought the property, known as LNR Warner Center, for $311 million in 2006 as part of its joint venture with Japan’s Sumitomo Life Realty. It wasn’t clear if the company has officially put the property on the market, or what price it is seeking.

“With respect to the marketing of Warner Center, our policy is not to comment on potential future transactions,” a spokesperson for Hines said in a statement emailed to TRD.

The 808,274 square-foot office park comprises four five-story office buildings, one three-story building and two parking structures. Tenants include Health Net of California, which occupies more than 40 percent of the complex, as well as UMG Recordings and Viking River Cruises.

Occupancy levels at the property recently rebounded to 93 percent, after slipping to 74 percent in 2014.

A $174 million CMBS loan attached to the property was recently transferred to special servicing due to the possibility of a default, according to CMBS data analytics firm Trepp. According to the spokesperson for Hines, the loan was transferred “for purposes of discussing a potential extension.”

In August, Hines made an attempt to extend the loan until April 2017 in order to give it time to sell the property, according to Trepp. But the loan is still currently slated to mature next month.

The loan was originated by Bank of America in 2006, records show.

A sale would just be the latest is a long line for Hines, which has been disposing of many of its L.A.-based assets in recent months.

A fund managed by the Houston-based company is also selling a 19-story office tower at 12100 Wilshire Boulevard to Santa Monica-based REIT Douglas Emmett Inc. for $225 million, or close to $650 per square foot, TRD previously reported. That price is exactly what Hines paid for it in 2007, when it purchased the property from RREEF Property Trust.

-Katherine Clark

Reimagining LA's shopping malls

The Real Deal

 

When The Grove opened in 2002, it was a breath of fresh air for Southern California shoppers — literally. After years of grand openings for enclosed, suburban-style malls, here was an open-air shopping center reminiscent of a theme park, with trolley service, trendy restaurants and a movie theater.

Flash forward nearly 15 years, and a host of mall owners are scrambling to revitalize their L.A. properties by tearing off rooftops and adding attractions and amenities. They’re counting on entertainment and social experiences to draw in customers for high-end retailers and justify the soaring lease rates.

“The suburban-style mall had a great run, but people are just not shopping that way anymore,” said retail analyst Lynch of Los Angeles-based A&G Realty Partners.

Lynch said that shopping malls are  becoming integrated with mixed-use complexes, and he expects that trend to continue over the next decade. “The most successful will be those that are extraordinarily sophisticated and ready to spend capital to build an omnichannel experience for the customer,” he said.

The Grove — with sales of $2,200 per square foot, making it the second-most-productive U.S. shopping center, according to Green Street Advisors — has played up the experiential theme. The mall offers hotel-style concierge services to guests, such as making arrangements for birthday parties, reserving tables at restaurants and securing private trolley rides.

“We’re constantly looking for ways to innovate and provide additional services and amenities for our guests,” said Jack Levy, the executive vice president of operations for the mall’s owner, Los Angeles-based Caruso Affiliated. “One of the ways we have adapted is by having pop-up shops at The Grove.”

The Grove has hosted pop-up shops by actress and organic-product maven Jessica Alba, who opened Honest Beauty, and actress and fashion designer Nicole Richie, who showcased her House of Harlow fashion line. The celebrity fashion designer Rachel Zoe’s first brick-and-mortar pop-up shop made its appearance here. The shopping center has also been home to first-to-market retail concepts, such as Elizabeth and James, which is Mary-Kate and Ashley Olsen’s first dedicated store for purchasing their fashion line.

Experts say that some of L.A.’s tired suburban malls are undergoing pricey makeovers to try to keep up with contemporary concepts like The Grove as well as with the nearby The Americana at Brand, a similar property that Caruso opened in 2008.

In fact, mall owners are opening their wallets for major building nationwide. The value of shopping-center construction, including work on new and existing structures, reached nearly $17.2 billion in 2015, according to the U.S. Census Bureau — the highest level since the end of the last economic cycle in 2008.

Occupancy rates have held steady at around 94 percent over the last two years. Net operating income increased 2.6 percent in the first half of 2016 compared with the same period a year earlier, while base rents rose 2.6 percent over the same time frame, according to the International Council of Shopping Centers.

Here’s a bird’s-eye view of sevveral high-end mall renovations that are either under construction or ready to break ground in L.A.

Promenade at Howard Hughes Center

The neighborhood has certainly changed since the 250,000-square-foot Promenade at Howard Hughes Center opened in 2000. At 6081 Center Drive, on land that was once owned by aviation and business mogul Howard Hughes, it sits at the periphery of Silicon Beach.

The mall owners say the burgeoning demand for office space in nearby Playa Vista — where Google and Yahoo have set up shop — makes this a promising time to redevelop the shopping center. “We’ll capture a good part of that momentum,” said Philip Cyburt, CEO of Laurus, the Los Angeles real estate investment firm behind the Promenade’s reinvention.

Laurus purchased the mall from Irvine-based Passco in June 2015 and plans to invest $30 million in the two-level, mixed-use center that has thus far “not been able to get any momentum through its life cycle,” Cyburt said.

The design, by the L.A.-based Jerde Partnership, will include pedestrian-friendly access via a new crossing on Center Drive and an update to tired Art Deco retail façades, as well as a new courtyard with an outdoor movie-screening area and fire pit. Interior changes include reconstructed retail spaces that will sport smaller footprints and shorter bay depths. The result will be an increase in the number of leasable tenant spaces.

Construction is expected to begin in October, when the second floor of the southeast portion of the mall will be removed to create an open-air space with multiple entry points. The project is slated for completion in the second quarter of 2017.

Westfield Century City

Mall owner Westfield plans to keep its Westfield Century City, located at 10250 Santa Monica Boulevard, partially open during its $800 million redevelopment.

The vast undertaking, which is projected to get under way by the end of 2016, involves tearing down three-fourths of the mall. Redevelopment plans include a renovated 1.2-million-square-foot shopping center, eight acres of new outdoor public space, additional parking and 70 more shops.

Celebrity chef Mario Batali has taken a 50,000-square-foot space for his food-emporium concept Eataly, which has existing stores in New York and Chicago and expansion plans for Boston as well as Los Angeles and beyond.

At least one tenant wasn’t pleased about the addition of the New York-based Eataly. Gelson’s Markets, a Southern California grocery chain that has been a mall tenant since 1967, disputed the addition with Westfield, saying it violated the company’s lease agreement. A spokesperson for Gelson’s said on Aug. 31 that it had reached an agreement with Westfield. The mall owner declined to comment.

Despite the lawsuit, Lynch, the retail analyst, said the Batali venture is a good get for Westfield. “Eataly is a home run,” Lynch said. He also said that today’s shoppers want to have “restaurant and entertainment experiences that are unusual, and that includes all kinds of dining experiences.”

Fashion is another key element of the planned renovation, with the center adding retailers like Nordstrom, which plans to move from Westside Pavilion.

“Westfield Century City will elevate fashion retail to a new level of excellence, combining the most sought-after brands and exceptional customer amenities,” Lowy, co-CEO of Westfield, which also operates the Westfield World Trade Center in New York, told The Real Deal through a spokesperson.

Westside Pavilion

Speculation is rife about how Macerich, a Santa Monica-based real estate investment trust, may redevelop the Westside Pavilion, which is on the verge of losing its anchor tenant. The 755,000-square-foot mall, located at 10800 West Pico Boulevard, dates to 1985. In recent years, the mall’s owners have discussed some ideas with local community groups but haven’t announced definite redevelopment plans.

Bob Aptaker, vice president for development at Macerich, met with a homeowners’ association near the mall in late 2015 to discuss some possibilities, such as replacing at least part of the mall’s fortress-like walls to allow in more natural light, as well as opening up more easy pedestrian access from Pico Boulevard. Other potential plans included expanding an existing parking structure and converting part of the mall into creative office space.

In early 2017, the Westside Pavilion’s flagship store, Nordstrom, will decamp for new digs at Westfield Century City. Whole Foods is rumored to be interested in taking this space.

A representative for Macerich declined to comment for this article.

Beverly Center

In Beverly Grove, near Beverly Hills and West Hollywood, the 886,000-square-foot Beverly Center, located at 8500 Beverly Boulevard, is in the midst of a $500 million makeover.

Mall owner Taubman Centers, the Bloomfield Hills, Michigan-based global retail real estate company, has hired architecture firm Studio Fuksas of Rome, Italy.  Studio Fuksas has designed a number of high-profile international projects, including Shenzhen Bao’an International Airport in Guangdong, China, and the new National Archives of France in Pierrefitte-sur-Seine.

The renovation is slated for completion in 2018. Plans include a series of interior skylights, a perforated steel façade and an updated streetscape with drought-resistant greenery. Inside, a center courtyard with a 20-by-35-foot LED screen will serve as an informal gathering place as well as an event and exhibition space.

Anchor tenants Bloomingdale’s and Macy’s are expected to remain, with the new tenants including Apple, Burberry, Jimmy Choo, Prada, Salvatore Ferragamo, Tiffany & Co., Traffic, Uniqlo and Versace.

“Brands are rediscovering that they can only connect emotionally with customers in a brick-and-mortar environment. In our case, the environment needs to evolve into a retail, dining and gathering space that reflects the lifestyles, personality and interests of the Los Angeles community,” William Taubman, the chief operating officer of Taubman Centers, said in an interview with TRD.

The Beverly Center plans include a series of street-level restaurants that open to pedestrian traffic off of West 3rd Street, and a gourmet food hall, called The Street, on the eighth-floor terrace. Operated by James Beard Award-winning Chef Michael Mina, the food-court concept will include cuisine from around the world sold in an outdoor bazaar-style setting.  

The Bloc

The Bloc, the only one of these redevelopment projects located in DTLA, is a 1.1-million-square-foot, $180 million redevelopment project built by Los Angeles developer Ratkovich in partnership with National Real Estate Advisors and Blue Vista Capital. 

The developer bought the former Macy’s Plaza — a retail, office and hotel complex — in June 2013 for $241 million. In early 2014, the company removed the mall’s roof for an open-air food court and 150,000 square feet of retail space. In April, Ratkovich obtained a $225 million loan to refinance The Bloc. The development opened to the public at 700 South Flower Street in June with the unveiling of The Square, a plaza-level public space.

Ratkovich executives say that retailers are in the process of building out individual storefronts; however, the retail portion of this project has been delayed, and some market pros suspect that not all of the retailers who have been announced will move in.

-Staff

8 Awesome, and Strange, Offices

Fox News

 

Since we spend so much time at the office, they shouldn’t just be for work. What about relaxing, working out, eating, even playing games? These are activities that should be done in offices as well -- or at least some companies think so.

A colorful, engaging and energized office environment can inspire and motivate employees -- especially those with grueling hours such as coders. For companies such as Google, Autodesk and Groupon, having a stellar office design gives them a competitive edge when recruiting top talent.

Today, more and more offices are focusing on perks and office aesthetics to inspire and encourage employees. Basketball courts and videos games are only a few of the ways companies cater to employee needs and wants.

Check out these 8 awesome spaces that will give you office envy.

Take a quick nap at Googles Zurich office.

Need a break from all the hustle and bustle? Google’s Zurich campus boasts unique pods for employees to get some peace and quiet.

With egg-shaped pods and gondolas converted into meeting rooms, the office is an architectural masterpiece that inspires and motivates. It’s no wonder Google tops lists as one of the most innovative companies.

Camp out in Autodesk.

California-based Autodesk takes the pressure off employees by providing them with some “nature” to clear their heads.

Clad with a hammock, some shrubbery and a “campfire,” you may fool yourself into thinking you’re in Yosemite.

Shoot some hoops at Adobe Systems.

Act like a child at Groupons headquarters (OK, this ones a little weird).

As the story goes, a boy named “Michael” used to live at Groupon’s Chicago headquarters before the company moved in. Rumor has it the folks at Groupon were kind enough to let him stay there.

The wallpaper clad room is a teenage boy’s dream, with Cheerio boxes, a bicycle that plays Sade’s “Smooth Operator” when you pedal, a toilet full of Almond Joy candies and an old iMac filled with Van Halen music.

Although its history is likely a hoax, Groupon comedy writers are said to use the room for inspiration or to “blow off a little steam,” Business Insider reports.

Work in your very own storage unit.

Pallotta Teamwork, a charity event company, was resourceful in its office design. Fearing major expenses furnishing and maintaining the massive warehouse the company moved into, Pallotta got crafty and came up with methods to cut costs and create a fun and modern office space.

Utilizing shipping containers as private offices, the company turned the drab warehouse into a colorful and creative environment.

Play video games in the dark.

It’s an HR policy at Riot Games to only hire employees who enjoy playing games.

Because of this, the company behind the massive hit League of Legends created an office that supports workers who are playing games all day long with neon lighting and an arcade-like environment.

It doesn’t end there though -- the entire office caters to the likes of these gamers and brings to life its product. Upon entering the Los Angeles office, you’re greeted with League of Legends characters Annie and Tibbers.

Be in-the-know at Seamless.

Curious how hot it is in Dubai? Maybe you just want to know what the weather outside the office is. At Seamless headquarters, “ The Weather Wall” can help.

With four massive, high-res, touch screen TVs adorning the wall, employees can check the weather, search the web and get updates on Seamless analytics.

Although those actions don’t sound very “high-tech,” the beauty of this wall will make your jaw drop.

Work in a Cold War-era nuclear bunker.

Once used as an atomic bomb shelter, Swedish internet provider Bahnhof AB’s office in Stockholm is 100 feet below the surface.

The data center located inside a Cold War-era nuclear bunker is one of the most advanced office designs seen yet. With caves, shrubbery and angular, glass offices, the advanced office space is both rooted in the past and ahead of its time.

-Rose Leadem

Westwood Restructures $1B of Assets into Single Company

GlobeSt.com

 

LOS ANGELES—Westwood Financial Corp. has restructured the majority of its retail assets into a $1.2 billion company, consolidating 280 entities that covered a total of 77 assets into a  single company. The move streamlines management and will help to drive growth at the firm.

“This was really a natural and strategic evolution of a company that was grown organically by two entrepreneurs,” Randy Banchik, co-CEO of Westwood Financial Corp., tells GlobeSt.com. “The company has a history in real estate investment of changing product types as the market needed and adjusting our management style as the opportunities in the market changed. As a 45-year-old company, this was a coming together of a need for succession planning, streamline operations and to reduce the complexity of a very large portfolio and solidify our investment platform so that we can have maximum opportunities for growth and a successful operation of the portfolio.”

The firm had a total of 120 assets prior to the restructuring. The balance of the properties will continue to be managed as a third-party ownership by the new firm. “The balance of the properties was predominately owned by the founders of the company and those will continue to be managed third-party by the new company,” Joe Dykstra, co-CEO of Westwood Financial Corp., tells GlobeSt.com. The complicated transaction required 28 attorneys and 20 title and escrow company representatives as well as the full 81-employee base of the firm to complete.

The restructuring positions the firm for optimal growth. Westwood Financial is looking to grow its portfolio and gain a greater foothold in the Western US by focusing on neighborhood and daily convenience properties, which they say represents the new retail. “Our goal is to continue to evolve this portfolio into a stronger retail investment platform and to continue to evolve the company into a top performing retail operating company,” says Banchik. “We now have a platform and a synergistic group of properties. The growth of our portfolio going forward is going to focus on the manner in which we can acquire and mold the portfolio and the types of that we will target to grow that portfolio, which will be directed by the way that retail centers are evolving.”

In terms of location, the firm is focusing on large cities nationwide. “We intend to continue to shape the portfolio by leaning on the larger MSAs in the country,” adds Dykstra. “We are going to be offensive when it comes to navigating the business and are looking to bigger and bigger cities as well as gaining more of a foothold in the West Coast.”

The restructuring follows a recent rebranding for the firm, which included a new logo, new signage, and a new tagline “Retail. Evolved.”

-Kelsi Maree Borland

Crowdfunding Real Estate Commands Cautious Excitement

GlobeSt.com

 

LOS ANGELES—It is the shared economy, expanded. “The ubiquity of crowdfunding websites like GoFundMe and Kickstarter, coupled with Title III of the Jumpstart Our Business Startups (JOBS) Act going into effect earlier this year and opening up public, online crowd capitalism, made it almost inevitable that crowdfunding platforms geared towards real estate investments would also explode.” That is according to Hana R. Hong, an associate and Michael Polentz, co-chair of the real estate and land use practice group at Manatt, Phelps & Phillips LLP in this exclusive commentary on the subject.

Forbes.com has reported that hundreds of millions of dollars were raised through crowdfunding for real estate in 2015, and Crowdsourcing.org’s inaugural report on real estate crowdfunding, 2015CF-RE Crowdfunding for Real Estate, projected that real estate crowdfunding would reach $3.5 billion in 2016, mainly from North America.  Clearly, the fervent interest is there for real estate crowdfunding sites like Fundrise and GroundFloor—but in such a young, untested industry, what are some things an interested investor can do to better protect their interests?

First, a prospective crowdfunding investor should have a clear idea of their objectives before buying into an investment and vet, as much as possible, the probability of satisfactorily return on such objectives from the platform they ultimately select.  When chosen well, a crowdfunding real estate investment can be an excellent way for an investor to test out a market or property class without investing as much time or resources as they would with a direct real estate purchase.  This can especially appeal to non-accredited investors (people earning less than $200,000 annually or have net worths of less than $1 million).  These individuals can now participate in crowdfunding opportunities to invest in real estate without meeting one or more of the traditional aspects of real estate investing, such as higher buy-in requirements, additional capital calls during the period of investment, or having accredited investor status.

However, not every deal opportunity is equal.  In addition to thinking critically of their objectives, Forbes.com recommends that investors also look into such considerations as how long the portal or platform has been, and seems likely to be, active; how it functions (a mere listing service versus working closely with a broker-dealer, who may or may not also be a concurrent investor); if it has venture backing and/or is sufficiently capitalized to meet obligations; how the crowdfunded money is handled by the portal or platform; and the portal’s due diligence and vetting processes for its listed opportunities.  Notably, Bloomberg.com cited Ian Ippolito, a Florida-based entrepreneur and founder of The Real Estate Crowdfunding Review, as determining “only one in five of sites the sniff test ,” after he evaluated more than 100 such sites for transparency, fees, investment opportunities and venture capital backing.  Ippolito opined: “Real estate crowdfunding is still in the hype phase…it will before the expectations become more realistic. In the meantime, hordes of these platforms feel that ‘if I build it they will come.’”

Accordingly, a prospective crowdfunding investor should take the usual precautions such as limiting the exposure of their investment portfolio and not investing funds that they need in the short-term or are unwilling to lose. “There’s going to be very little liquidity ,” continued Ryan Feit, chief executive of SeedInvest, to Forbes.com, “so unlike investing in a public stock where you can trade your shares the next day if you change your mind, when you’re investing in a private company, you’re holding on for the long-term, until an acquisition or an occurs.”  In other words, the more direct nature of crowdfunding investment should not alter an investor approaching it as a calculated risk that should be thoroughly appraised.

Finally, it is critical for investors to understand the limited exit strategies. As pointed out by Crowd101.com, the terms and valuation should be included in the documents presented at the time of the initial investment.  Such disclosed terms should include any mandatory hold periods and amounts of required investment, and when coupled with the above research of an investor’s goals, risk tolerance, and vetting of platform, entity being invested in, and each specific deal, then the prospective investor should be in a much stronger position to make the best individual investment.

Despite the inherent risks, it is clear that the crowdfunding culture is here to stay.  And as the crowdfunded real estate industry continues to grow and evolve over the next few years and more information becomes widely available about the more trustworthy players, prospective and current investors should also work closely with their attorneys and professional advisors to fully evaluate and understand the opportunities and risks—financial and legal—that come with navig
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Please contact us with any comments or questions at questions@spamdex.co.uk. Spam Archive is a non-profit library of thousands of spam email messages sent to a single email address. A number of far-sighted people have been saving all their spam and have put it online. This is a valuable resource for anyone writing Bayesian filters. The Spam Archive is building a digital library of Internet spam. Your use of the Archive is subject to the Archive's Terms of Use. All emails viewed are copyright of the respected companies or corporations. Thanks to Benedict Sykes for assisting with tech problems and Google Indexing, ta Ben.

Our inspiration is the "Internet Archive" USA. "Libraries exist to preserve society's cultural artefacts and to provide access to them. If libraries are to continue to foster education and scholarship in this era of digital technology, it's essential for them to extend those functions into the digital world." This is our library of unsolicited emails from around the world. See https://archive.org. Spamdex is in no way associated though. Supporters and members of http://spam.abuse.net Helping rid the internet of spam, one email at a time. Working with Inernet Aware to improve user knowlegde on keeping safe online. Many thanks to all our supporters including Vanilla Circus for providing SEO advice and other content syndication help | Link to us | Terms | Privacy | Cookies | Complaints | Copyright | Spam emails / ICO | Spam images | Sitemap | All hosting and cloud migration by Cloudworks.

Important: Users take note, this is Spamdex - The Spam Archive for the internet. Some of the pages indexed could contain offensive language or contain fraudulent offers. If an offer looks too good to be true it probably is! Please tread, carefully, all of the links should be fine. Clicking I agree means you agree to our terms and conditions. We cannot be held responsible etc etc.

The Spam Archive - Chronicling spam emails into readable web records

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Spamdex - The Spam Archive Located in London, SW19 8AE. Phone: 08000 0514541.