Menu Close

Three Things to Know About the Fastest Growing Segment of the US Housing Market: Single Family Homes for Rent

By Laurent Bouzelmat and Diane Abruzzini

In the decade that followed the 2008 recession, multifamily real estate development exploded in popularity. 2018 is the first year since 2011 where the US will see fewer multifamily units built than in the year prior, according to a Yardi Matrix study (summarized here). This was due to a number of factors, from rural-urban migration to loss of consumer confidence in the housing market. Now, in 2018, the supply of new single-family homes has not matched demand; that competition continues to drive single-family home values higher. According to US Census Bureau data, the number of Americans living in all  rentals  has dramatically increased to almost 37%. During that same period, the number of owner-occupied properties decreased.

Marketwatch explains single-family rental investing in an effective way:

“It is like an inflation-adjusting bond with an equity kicker. The rental income less operating expenses generates current distributions – like the coupon on a bond – and rents can be adjusted annually [as most leases are for one year], providing inflation protection.”

  1. Low Supply, High Demand

Today, the number of Americans living in a rental unit is at an all-time high since 1965. A research study by NAREIT shows a 30% annual growth rate in SFR over the past three years – about double that of multifamily –  making it the fastest growing sector of the US housing market. You’ve heard it before: millennials, the largest generation in the US, are not buying housing at the same rates as their predecessors. Student debt, entering the job market during the recession, and loss of confidence in housing markets all drive this trend among young adults. Retirees and empty nesters contribute as well, liquidating their homes in order to downsize and fund retirement.

Developers over the last decade have largely focused on multifamily development. More than half of owner-occupied US housing stock was built before 1980, and the median age of that housing is 37 years old, according to the 2017 American Community Survey. The Wall Street Journal attests that this housing shortage is also due to a “decades long push for young people to go to college”, whereas fewer attend vocational schools and enter such blue collar professions as the construction trades.  The trend toward higher rates of college education has not only attributed to a decrease in skilled construction labor, but has also contributed to increased debt load on the younger generations, restricting their ability to purchase single-family homes. In addition to heavier debt burdens, the cost of housing has been rising at higher rates than wages. In 2017, the S&P CoreLogic Case-Shiller US National Home Price NSA Index rose 6.3%, two times the rate of income growth.

Home construction, specifically for single-family “starter homes” has slowed to nearly the lowest level in 60 years. Multifamily has gained popularity as US residents become increasingly concentrated in urban areas, making land in these areas rise in value. The National Association of Home Builders estimates construction of 900,000 new homes in 2018, which represents only 70% of demand based on population growth. This low supply coupled with increasingly high tenant demand has contributed to the growth of the single family homes for rent asset class over the past decade.

  1. Operating Margin Potential

Fix-and-flip is a process that many Americans are aware of: to purchase an undervalued property, put in some updates, improve curb appeal, and sell, hopefully at a profit. Single family homes for rent (SFR) as an asset class is fairly new and small compared to, say, multifamily, which provides more potential for large scale efficiencies of scale. However, single-family homes, especially detached housing, offer some values not always available in multi-family rentals, including (generally) basement and attic space, garage, personal laundry room and privacy.

Commercial real estate technology advancements have really boomed lately, leading to new types of smart home technology, on-demand maintenance, drone property tours and more. Many of these technologies help SFR managers and fund managers to achieve better operating margins. This creates a dual strategy: fix-and-flip for quick appreciation potential, coupled with improving margins for rental cash flow.

Some innovative commercial real estate technologies to keep an eye on:

  • 3D, interactive and virtual property tours, e.g.. Smarter Listings by EveryScape
  • Virtual reality 3D models for prototyping, e.g. Realnex
  • Automated post-close services, making investor management more efficient, ex Investor Management Services.
  • Automatic rental payments, e.g. Schedule My Rent, Appfolio.
  • The “Ubers” of property management, connecting service providers with properties in need of service, e.g. Servus.
  1. Diversification and Inflation Protection

When an investor places funds in a multifamily unit, the location and infrastructure are crucially important. Local employers and schools, occupancy rates, and access to amenities all affect the value of a multifamily investment. When an investor invests in a fund of single-family homes for rent, there is slightly more diversification. These properties often (but not always) span across multiple geographic regions, vary in proximity to urban locations and large employers, and require differing amounts of updates. While all real estate investments are risky and most are illiquid, SFR funds do offer extra diversification, which can absorb poor performance of certain components of the portfolio.

Unlike many other non-real estate asset classes, SFRs and multifamily rentals are more protected against the risk related to rising interest rates. An increase in rates is often correlated with inflation for ‘useful assets’, which is a category that real estate falls into. There is a strong correlation between rents, interest rates, and inflation. When interest rates rise, an SFR manager can adjust rental rates annually, while experiencing higher appreciation on the asset itself.

Get in Touch

Biotech Investment Opportunity on the Platform

Funding BioEclipseTherapeutics and its cancer immunotherapy

BioEclipse Logo.png

San Francisco, CA | Originally published on PR Newswire.

BioEclipse Therapeutics Inc. (“BioEclipse”) announced today that Brokerage Services has launched marketing for “Revelis BioEclipse SPV, LLC”, a Single Purpose Vehicle that will invest in convertible preferred stock of BioEclipse.

BioEclipse is developing pathbreaking approaches to eradication of solid and liquid tumor cancers, using a proprietary multi-mechanistic immunotherapy. Preclinical studies indicate approximately a thousand-fold increase in cytotoxicity versus preclinical studies of FDA-approved immunotherapies–without evident side effects.

Joe Ventresca, Managing Director of Investment Banking at, declared, “We’re proud to be selected as Placement Agent in this important transaction. continues to bring to market highly innovative approaches in life sciences that hold great promise for human beings.”

Oliver Hopkinson, Co-Founder of Revelis Capital Group, stated, “As founding venture capital investor in BioEclipse, and as Manager of the SPV, we’ll enthusiastically join this funding to help initiate human clinical trials of the CRX-100 cancer therapy. We have full confidence in CEO and co-founder Pamela Contag Ph.D., a successful serial entrepreneur, and her talented team. We hope through our active efforts to turn the promise of BioEclipse into reality.”

Dr. Contag commented: “CRX-100 is only one of many potentially effective combinations within our proprietary platform. Essentially, CRX-100 wraps a cancer-killing virus inside activated immune cells derived from the patient. In animal studies, we are seeing impressive cytotoxicity without measurable side effects. We also expect formation of a long-term cytotoxic response from the patient’s active immune system, ​due ​to lysed cells expressing tumor-specific biomarkers.”  She added, “Our first clinical trial target is ovarian cancer, where patient morbidity is high and therapeutic resistance common. All xenograft models show tumor killing and no observable toxicities, as to ovarian SKOV-3 and UCI 101, prostate and the rare cancers glioblastoma and neuroblastoma. Furthermore, CRX-100 demonstrated excellent tumor-killing capabilities and safety profile, with long-term immune protection from recurrence of the targeted tumor, in these immune-competent mouse models: Non-Hodgkin’s Lymphoma OCI-Ly8 (B-cell), hepatocellular carcinoma, breast 4T1, lung metastatic 4T1-L, and colorectal MC-38.”

BioEclipse Therapeutics Inc. is a venture-stage cancer immunotherapy company, with headquarters in South San Francisco. Brokerage Services, LLC is a fifty-state registered broker-dealer (Member: FINRA, SIPC) that specializes in private market equity and debt transactions using its proprietary general solicitation platform.  Revelis Capital Group, LLC is a family office-related investor in venture capital and private equity, with offices in Colorado.

For further information and risk disclosure (available exclusively to verified accredited investors under the 506(c) exemption), contact Joseph Ventresca,

Disclosure: This release contains “forward-looking statements.” There can be no assurance of their accuracy. For a full disclosure of risks, accredited investors should request the offering circular.

Get In Touch and Mick Law Set the Bar Higher for Private Placement Due Diligence


Boutique investment bank partners with top-tier law firm to increase quality and distribution of private placement investment offerings.

New York, NY and Omaha, NE

mick law Holdings, Inc. and Mick Law P.C, LLO have entered into a partnership agreement to bring greater transparency to company and offering diligence.  In addition, Bryan Mick, President of Mick Law, will join’s Board of Advisors.

Investment banking is a highly regulated industry. Regulations around private placement securities are constantly evolving to create new opportunities but are also becoming increasingly more complex. In part because of regulatory changes, the number of private placement security offerings have significantly increased throughout the past decade, all with differing levels of risk.

“As private companies and partnerships are subject to limited oversight when sharing company information connected to a private securities offering, it’s the role of a licensed broker-dealer to bring the greatest level of transparency.  Brokers have a responsibility to investors and should have a high bar when it comes to evaluation of a private offering,” said Aaron Pollak, CEO of “Well-vetted offerings also need to stand out among the numerous private placements of varying quality. Our investment bankers, financial analysts and lawyers give each of our offerings a high level of scrutiny. Registered Investment Advisors (RIAs) can look to a Mick Law due diligence and underwriting opinion as a seal of certification that the offering has been vetted as to legal compliance and financial structure to the highest standard, no matter the offering size”.

Mick Law is known nationwide as a leading expert in due diligence; RIAs and broker-dealers frequently call on the firm to issue legal opinions regarding securities offerings. Mick Law has established its reputation as an expert in securities offerings, winning Finance Monthly’s Due Diligence Law Firm of the Year Award for three years in a row (2015-2017). This expertise comes from thoughtful inclusion of business professionals among the legal team–as well as real estate underwriters, petroleum engineers, and asset class researchers. issuers will have the option to request a legal opinion from Mick Law. By doing so, issuers open their deal and their principals up to the highest standard of transparency.’s investment platform provides for verification of accredited status, access to all offering documents, suitability and bad actor checks, and management of investor subscription and payments. The due diligence opinion will be an interactive button on the investment’s offering page on the portal, specifically for FINRA-licensed broker-dealers, RIAs, and syndication partners.

“Mick Law legal opinions analyze all material facts about the structure of the investment, economic trends, and prospective asset performance, plus full legal vetting of principals, deal documents, and disclosures.” said Bryan Mick. “This effort by to standardize the most rigorous due diligence efforts goes above and beyond expected fidelity; we hope to see others follow their lead.”

Originally published on PR Newswire.

Get in Touch Reports on First Half of 2018

From our CEO

Our growth through the first half of 2018 brought several new opportunities for our network to access offerings, increase compliance efficiency, and manage investments with technology.

We have significantly increased our team size, including introducing new roles in compliance, investment banking, technology, and marketing.  Because of our dedicated team members, the offerings on our platform continue to increase with regularity. In the first two quarters of 2018, we have already seen 150% growth of the total funds raised on the platform over the aggregated two years prior.

We are excited about our growth and ability to continue to bring vetted offerings through quality technology out to our network.  Whether you’re a broker-dealer, registered rep, advisor, or investor – we strive to source suitable products and to develop the most streamlined process and technology for evaluating and subscribing to private placements.

Commitment to People and Place

As we look back on these past six months, and plot the months ahead, we remind ourselves that our growth and success are due to many factors, both internal and external. People are at the core of everything we do.

As a Vermont-based technology company and investment bank, we are subjected to a competitive labor pool. Yet we are committed to the state of Vermont, Burlington’s growing tech economy, and allowing our employees and their families a quality of life for which Vermont has recently been ranked #1 in the US.  We are proud to build our foundation right here, and it’s an unbeatable place to welcome our clients and partners.

We have opened our second office in Midtown Manhattan, which places us in the heart of the financial economy. We have representatives in New Jersey, and are looking outward towards a West Coast presence as well.

This year, we have welcomed a number of very important clients and partners into our firm.

We have completed our largest white label integration of our TXACT software with Chalice Wealth Partners, an independent RIA and broker-dealer. This project gives their independent reps access to private placements, while increasing distribution for issuers and brokers. has also developed a strategic partnership with Investor Management Services (IMS), a  provider of post-close investor technology solutions such as automated waterfall distributions, specifically for real estate issuers. This partnership helps and IMS issuers and sponsors streamline the investor management process, from pre- to post-close.

Learning is a Lifelong Endeavor

Our company sprang to life after changing regulations enabled a portion of the capital raising process to move online. As we entered this uncharted territory, we have had to adjust and adapt to natural feedback, and continue to grow as a company. We strive to incorporate new features when appropriate, as well as to specialize in areas that our clients help direct us to. Our heightened focus on commercial real estate, as well as private equity investments in the life sciences and technology sectors, are prime examples of this.

We want to thank you for being part of our professional network, we look forward to hearing from you as we strive to develop the ecosystem to seamlessly and securely show, find, and complete private placement investments.


Aaron Pollak

Top Trends

The industry stand-out this year is commercial real estate (CRE). CRE offerings have only made up 8% of our offerings and 2% of total capital raised thus far. However, our newly minted Head of Real Estate, Greg Brown, as well as our partnership with NAI Dileo Bram have positioned CRE as the fastest growing industry on the platform.


Private Offerings sold through by Industry, by number of offerings. All offerings have been sold by Brokerage Services, LLC.

Top Trends of 2018:

  1. Growing number of commercial real estate offerings
  2. RIA partnerships have expanded our distribution network
  3. Enhanced electronic signature capabilitiesEsigheader

“The newly enhanced eSignature feature solves the pain point of having to email multiple parties (often many times each) to sign, scan, upload and re-send these documents. Our solution prioritizes security for all parties, and enables issuers to countersign and appropriately store documents”.                                                Christa Ferrari, Chief of Solutions

Growing Team

GregGreyBackgroundHeadshotsGreg Brown has taken the lead in’s Real Estate sector. Through Greg’sexperience, we have been able to onboard a number of new CRE offerings. His weathered perspective has contributed valuable informational resources to the blog, helping issuers and investors understand the many nuances around CRE investments. 


Joe Ventresca has more than 20 years of experience in investment banking and financial services. A previous partner to in his role as founding partner at Asgard, Joe will now be working with our team directly as Managing Director of Investment Banking.


Diane Abruzzini has worked as an entrepreneur, consultant, and analyst with food and agriculture businesses as well as nonprofits. Since joining the team, she has been building out the firm’s marketing and communications programs. News Stories 

  1. RIA Biz Profiles Chalice’s Growing Success with Partnership
  2. Press Release Announcing Chalice and Partnership
  3. Press Release Announcing IMS and Partnership

New Private Placements on the Platform


Cambrian Rise
Opportunity to invest in one phase of a sustainable, mixed-use, multifamily community on the Burlington, Vermont waterfront.


BioEclipse Therapeutics, Inc.
(“BioEclipse” or “OpCo”) is a biotech company pursuing powerful, highly targeted immunotherapy strategies to attack and potentially cure certain types of cancer.


5003 Industrial Road, Wall, NJ
From our partners at NAI Dileo Bram, this industrial commercial property in Wall, New Jersey has housed a single tenant for more than 30 years.

Best Read Blogs

  1. Why do Deal Sponsors Charge Fees? by Greg Brown, Head of Real Estate
  2. Pitfalls of the Issuer Exemption, by Andy Szabo, Chief Compliance Officer
  3. How to Exceed Investor Expectations, BLOG SWAP by IMS
Forward-Looking Statements
This content may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of said safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “seek,” “strive,” “try,” or future or conditional verbs such as “could,” “may,” “should,” “will,” “would,” or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Except as required by applicable law or regulation, undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
Get in Touch


The Illiquidity Issue

by Greg Brown, Head of Real Estate

Investopedia defines illiquid as such, “the state of a security or other asset that cannot easily be sold or exchanged for cash without a substantial loss in value”.

Please understand, before investing in private real estate deals, that they are indeed illiquid. Let’s talk about how this fundamental characteristic of private real estate equity investments should impact your decision making process.

First–be able to do without the money you’re considering investing for AT LEAST the duration of the projected hold period. In most offerings, the deal sponsor will project a hold period for the asset. That could be as short as a projected 18 months for a turnaround or flip deal. Or it could be as long as ten years. You need to assume the investment cannot be liquidated into cash in a timely manner during your investment period. Caveat: some well capitalized deal sponsors will include provisions for them to buy back your investment should you need to liquidate. However, that buyback is usually at a very significant discount and not an obligation on the sponsor.

Deal sponsors are well aware they are asking investors to commit their capital with the inability to get it back. And for that, investors are usually able to command higher returns.

Second–read the offering documentation thoroughly to ensure you understand any restrictions on resale of your investment. Some deal sponsors restrict your ability to transfer your ownership interests to a third party. Most deal sponsors will allow for you to transfer your interests but withhold the right to approve to whom you are selling to. This protects deal sponsors and the other investors from your selling to bad actors like terrorists or money launderers.

Third–illiquid is not all bad. There is almost always a risk premium in total return projected for illiquid assets. Deal sponsors are well aware they are asking investors to commit their capital with the inability to get it back. And for that, investors are usually able to command higher returns. This premium is a big factor in why private real estate deals offer higher projected returns than publicly traded equities, even publicly traded REITs.  But, of course, the risk premium is a projected higher rate of return, not a guarantee of such results.

Lastly, I will say there are platforms out there chasing the goal of being efficient exchanges or marketplaces for private securities, many focusing on real estate. This is a noble goal. But we are YEARS away from there being the depth and breadth of both product and capital necessary to create highly liquid auction marketplaces for “alternative” investments like real estate.  

Get in Touch

Newly enhanced digital signatures added to the platform

We are pleased to show you our newest software feature: enhanced eSignatures. This new development adds efficiencies for investors, brokers, and advisors to execute documents. The eSignatures are compliant with USIGN and UETA laws granting eSignatures the same legal status as written signatures.*

New features include:

  • 100% in-app completion of subscription and placing funds

  • Auto-populated subscription agreement is customized to your template

  • In-app countersigning for issuers, advisors, and brokers

More Efficient Investing


“The newly enhanced eSignature feature solves the pain point of having to email multiple parties (often many times each) to sign, scan, upload and re-send these documents. Our solution prioritizes security for all parties, and enables issuers to countersign and appropriately store documents”.

 Christa Ferrari, Chief of Solutions

Organized Countersigning

If you would like to see an individual demo, please get in touch with

* The eSignatures are compliant with the requirements of the U.S. Electronic Signature in Global and National Commerce Act of 2000 (ESIGN) (enacted federal statute), and the Uniform Electronic Transactions Act (UETA) (uniform statute as model for state legislatures to enact) regarding electronic signatures and transmissions. These laws provide that eSignatures, properly executed, exhibit the same legally binding status as written signatures.
Get in Touch

The Assumptions In Real Estate Investment Modeling

by Greg Brown, Head of Real Estate

Assumptions are a necessary evil of projecting and attempting to predict the performance of real estate investments. If anybody had the ability to predict the future, they wouldn’t be in real estate….they would BE real estate. And not reading this piece.

When evaluating an investment it is important to understand where the income/revenue comes from. Not just what is contracted for today or at the time of investment, but where it is coming from in the future. This is where things can get tricky because many leases can be for five years or longer. Again, predicting or projecting what will happen beyond five years is still more of an art than a science.

Below are assumption characteristics of which to be mindful:

  1. Make sure returns are not dependent on overly aggressive future assumptions.

Is the deal sponsor projecting they will be able to lease space for two times current rent when the current tenant(s) vacate? Are they projecting that the asset will be worth 50% more in three years? Remember the assumed Internal Rate of Return (IRR) is NOT the same as annual cash flow. Do not assume that if a deal is predicting a 20% IRR that you’ll be receiving annual checks for 20% of your investment.

  1. Understand the sources of revenue.

Most projections include revenue from two places: cash flow and proceeds from sale. If you are looking for a stable cash flow investment, make sure the investment return projections are not heavily dependent on exit proceeds.

  1. Understand how many different assumptions are going into the model.

Below are some assumption examples:

  • Lease renewal probabilities of existing tenants: what is the likelihood a tenant will stay and at what rental rates?
  • Lease-up probabilities for new developments: how long is the sponsor projecting for a deal to reach projected occupancy hurdles? And at what rental rates relative to the market?
  • Exit sale assumptions/appreciation: most models project a hold period, and during this time it is likely assumed that the asset will go up in value. If the sponsor is projecting the asset to appreciate significantly over the hold period, there needs to be well-founded reasons for that projection.

Broker-dealer issued securities must be transparent regarding all of the assumptions included in a projection model. However, it is still the duty of the investor and (and the investor’s advisors) to understand the impact of the assumptions in order to identify opportunities, understand the risks, and mitigate them.  

Get in Touch

New Joint Venture Supports the Rise of Independent RIAs

Chalice Wealth Partners and partner to support growing sector of independent Registered Investment Advisors (RIAs).

Burlington, VT and New York, NY:

For years, independent broker-dealers were unable to offer the product range of major wirehouses to affiliated Registered Investment Advisors (RIAs), including alternative investments, but lately, that gap has been closing. Chalice and today announce a new collaboration, bringing increased product access and diversification across asset classes to independent advisors. is providing the Chalice Financial Network and its advisors with early access to high quality, broker-dealer vetted alternative investments to supplement traditional products. Private placement securities presented by span multiple industries including commercial real estate and growth stage companies. These investment products are less correlated with public financial markets and are not commonly accessible through traditional channels.

“As a leading fintech membership organization for independent advisors, Chalice is always looking to industry trends and investor preferences to equip advisors and clients with a full spectrum of products and services. We are excited to partner with, a leading alternative investments and capital formation platform, because of their commitment to quality offerings and ease of doing business with private investments in a compliant manner. has democratized and digitized access to alternative investments, and we see this trend continuing to gain traction in the future. We want our advisors to be able to capitalize on technology-driven changes to access both traditional and alternative investments.” said Keith Gregg, Founder and CEO of Chalice.

“ is committed to offering high quality alternative investments for our network of RIA, institutional and accredited investors,” said Aaron Pollak, CEO of “We look forward to further collaborating with Chalice, a best-in-class partner, as we make private securities syndication even more efficient.”

About Chalice Wealth Management: Chalice is a leading fintech membership organization for Registered Investment Advisors. Its management includes 30-year veterans of the financial services industry. Chalice offers clients investment products and services, leveraging collective buying power for rates that are competitive with the large wirehouse brokerages, and for terms that offer RIAs independence. Chalice offers its clients a full suite of back office services, from competitively priced investment products, to Turnkey Asset Management Platform (TAMP) solutions, retirement and insurance solutions, HR, payroll, RIA-friendly brokerage affiliation, and more.

About headquartered in Burlington, Vermont and with offices in Midtown Manhattan, Holdings, Inc. is a financial services company focused on providing alternative investment solutions and syndication. Holdings, Inc. includes subsidiaries that specialize in facilitating private placements and providing technology solutions. Holdings, Inc. is the parent company of Brokerage Services, LLC, a registered broker-dealer (Member, FINRA/SIPC) and Technologies, LLC, a technology services provider.

Press contact: Diane Abruzzini,,

Get in Touch

A Conversation Around Evolving Issuer Opportunities

By Diane Abruzzini

On June 19th, Lafayette Real Estate CFO Graeme Humpreys, Principal Scott Anderson, and Head of Real Estate Greg Brown joined host and IMS VP of Business Development Ron Rossi for Investor Management Service’s newest webinar: The Full Stack Capital Raise.

Before the JOBS Act, noted Greg Brown, raising funds for commercial estate was fragmented and inefficient: flying from family office to retail investors to accountants, and hopping on road shows to pitch your deal. Change has produced new opportunities, and the opportunities from the 2012 JOBS Act are still being tested and realized.

While there has been a good deal of attention paid to real estate crowdfunding, the real value lies in something much simpler: the investment banking process has moved online.

Scott Anderson, former FINRA enforcement director and current fintech attorney, walked us through what it means to utilize an exemption, and what considerations are involved with the newly established Regulation D 506 (c) exemption that enables the use of technology and advertising.

So what opportunity can issuers seize, based on these changes? While there has been a good deal of attention paid to real estate crowdfunding, the real value lies in something much simpler: the investment banking process has moved online. This simplified process allows for greater access, options, transparency, and investor focus.

Listen to the Webinar

As a broker-dealer, is bound by SEC regulations around the sale of securities. This is a highly regulated environment, and it requires a certain amount of expertise to operate compliantly and effectively. Moving the process online has proven more cost effective for issuers than legacy model broker-dealers, and those lower costs open up investor access to smaller size offerings.

Crowdfunding sites will advertise that they have tens of thousands of people registered, and you can blast your offering out to that many people. When using a broker-dealer, you don’t need tens of thousands of eyes and ears–those who are most interested in your deal will often be close in relationship or proximity. Because the capital raising process has been so inefficient, what issuers don’t realize is that the million-dollar check is down the street, not across the country.

The questions from listeners poured in when the conversation moved to compliance around the issuer exemption and Reg D offerings. Scott Anderson started by noting that the issuer exemption, a popular way for company directors and issuers to raise funds without a broker-dealer, is much more limited than people understand it to be. 

Once your offering is published on the internet, it is that much more risky.

The fact is, compliance for raising funds for private placements is a priority for the Securities and Exchange Commission (SEC), says Scott Anderson. There have been a number of cases in this area over the past few years to send a clear message to participants using the issuer exemption. For example, a number of immigration lawyers helping their clients with EB-5 transactions were all charged as “unregistered broker-dealers” because they were making a securities recommendation and receiving transaction-based compensation.

When you are putting together a deal privately with people that you know or have been introduced to, the notion that federal regulators are going to scrutinize your deal is unlikely (except in the event of deal failure and litigation). But once your offering is published on the internet, it is that much more risky.

Graeme Humphreys, CFO of Lafayette Real Estate LLC, spoke to the benefits his firm has seen from implementing new technology. Graeme noted that the level of transparency associated with custom, cloud-based technology, combined with the new regulatory landscape, has made it easy reach and track investors. “As we grow”, he said, “we need to be more efficient in how we interact with our investors in both raising funds and managing investors”.

Have a question? Get in touch. We’re happy to direct your inquiry to any of the panelists or the moderator.

Listen to the Webinar

Get in Touch

Blog Swap: Our Partners at IMS Share Their Insights

By Shelley Cernel, Director of Marketing, IMS

According to Forrester, we are 7 years into the Age of the Customer, a theory that says consumers are more empowered now than ever before and have elevated expectations for every interaction they have with a company, including their commercial real estate (CRE) firm. Technology has been a powerful driver of this concept, lowering the barriers to switching business providers and simultaneously presenting a challenge for firms to consistently provide high-value experiences for their investors. Indeed, commercial real estate investors are taking a big risk when they place their trust, and their dollars, in a CRE sponsor, and they want to feel confident that they are making the right decision. After all, choosing the right sponsor with the right portfolio opportunities can be the difference between success or failure. The sponsor, on the other hand, needs the skills, knowledge, experience, and tooling to manage the portfolio in an effective and trustworthy manner and to keep investors informed and satisfied.

Need further evidence that the investor experience should be a priority for 2018? A Salesforce study found that 1 in 2 consumers will switch firms if a company cannot anticipate their needs. And today’s clients have expectations for engagements and level of service that they never would have even imagined just five years ago.

Commercial real estate has long been an industry based on relationships where networking and face-to-face interactions are not optional.

Want to enhance client experience and engagement? Read ahead for four steps to understanding and exceeding investor expectations.

Build Meaningful Relationships

Commercial real estate has long been an industry based on relationships where networking and face-to-face interactions are not optional. Investors want to work with somebody who they trust, who has a solid track record and reputation, and who is similarly aligned in terms of values and business priorities.

Traditionally, raising capital would involve mass emailing your closest family members, friends, and peers. To build your web of contacts, you would need to attend networking events or connect with friends of friends. But now technology is making it easier and more efficient for sponsors to connect with and contact potential investors or vice versa. On the flip side, sponsors need to make a point to personalize engagements and continuously work towards building meaningful and ongoing relationships.

Invest in Technology

Investors, particularly those from younger generations, are increasingly less likely to work with people and companies that aren’t investing in their technology infrastructure or tech stack. Investors are looking for sponsors who have upgraded their operation, similar to other investment industries. They see things being done faster, smarter, or more cost effectively in other markets and expect to see the same in the commercial real estate industry. After all, you can manage your bank accounts and play the stock market online 24/7, so why shouldn’t you be able to also access your CRE investments?

Unfortunately, over 1/3 of the CRE industry still uses outdated technology on a daily basis. But many investors have already seen the progression of technology and its ability to monitor and track as key to the success of their portfolio. Further, it helps to streamline processes and drive efficiencies.

Communicate Efficiently

Effective and constant communication benefits both parties. The industry has started to shift from a demand perspective. Investors are starting to ask for more information; they want insights into deal flow, deal interaction, deal progress, and distribution history. That is why communication with investors is so important. An informed investor is obviously a good investor, but a well-communicated investor is a great investor. The more engaged and connected investors and sponsors can be, the more benefit both parties will receive from the relationship.

Today’s sponsors need to consider how they can better interact, engage, and communicate with their investors, ensuring they have the data, insights, and control that they need in real-time. Further, technology enables sponsors to communicate and provide information and data much more quickly than traditional methods, such as snail mail, enabling them to engage more readily with their investor base. Technology will lead to a deeper connection and enable effective engagement between sponsors and their investors.

Investors in today’s on-demand, instant gratification culture expect accessibility and transparency about their CRE investments, with real-time, on-demand availability offering both convenience and control.

Provide Accessibility & Transparency

Related to communication is the idea of transparency, something which 2/3 of investors cite as being an important consideration when making an investment. Investors in today’s on-demand, instant gratification culture expect accessibility and transparency about their CRE investments, with real-time, on-demand availability offering both convenience and control. Reinforcing this point is the fact that CRE is an increasingly global business. Regardless of your firm’s time zone and business hours, investors across the country or even the world need instant access to key information. Similarly, people need access beyond just their office, such as while working remote at home, while on the road for business trips and conferences, or even during their commute. With these requirements, investors expect to have their portfolio readily available online with 24/7, on-demand, real-time access, at any time and from anywhere.

Transparency also enables sponsors to build credibility with their investors. Ultimately, this open exchange of information facilitates a smoother transactional process and strongly factors into having successful long-term relationships.

It’s more important now than ever before to meet and exceed investor expectations, leveraging technology to create a value-add investor experience. As Deloitte says, “The real estate industry is on an accelerating disruption curve that will challenge industry leaders to look differently at the ways they do business and interact with their investors.” If you don’t take steps to make changes now, there’s a good chance your competitors will.

Older Posts