NAIOP, the largest commercial real estate organization in the country (the world?), held its Development ’14 conference in Denver this week. I had the pleasure of moderating a Crowdfunding panel that included Darren Powderly, the Founder of CrowdStreet, and Adam Hooper, the founder of RealCrowd.
A few observations:
— Institutional money is flooding the U.S. real estate market, especially the primary U.S. markets. One foreign investor, the Norwegian sovereign wealth fund, has about $1.2 trillion of capital (North Sea oil) and is committed to investing $9 billion per year into real estate assets. This is both an opportunity and a challenge for real estate Crowdfunding: an opportunity because of the capital; but also a challenge because capital is already so readily available.
— Good real estate deals are in short supply. Fund managers were scouring the conference floor for opportunities like kids in an Easter egg hunt.
— Crowdfunding remains a small blip on the radar screen. Many attendees I spoke with hadn’t heard the term. Our panel attracted an audience of about 30, while a panel on Logistics and another on Alternative Financing each attracted at least 200.
— Yet our audience was, by far, the most curious and enthusiastic I saw. When we had to stop, 10 minutes past our allotted time, there were still half a dozen raised hands.
— The conference was about real estate deals – finding them, developing them, financing them. And not just any deals, but the best institutional-quality real estate deals in the world. Yet because those deals are reserved for institutions, very few of the hundreds of attendees who spent three days talking about deals can invest in the deals. How long can that last in an Internet-empowered world?
It was a great conference and I want to thank NAIOP for inviting me to attend. The potential for Crowdfunding is enormous. Next year, I bet we get 100.
Questions? Let me know.