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United States Real Estate Crowdfunding Market is expected to Grow at CAGR 58.5% by 2027 owing to Increasing Investment from Institutional Investors along with Growing Prevalence of Specialised REITs, says Absolute Markets Insights

Published On 08 Dec 2020 10:41 AM


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Real estate as an asset class for crowdfunding has obtained optimum traction in the recent years owing to multitude prospects including capital growth, capital preservation, diversification and regular rental income amongst other factors. These favourable factors prevalent in the United States real estate crowdfunding market are encouraging both individual and institutional investors to proactively participate, thereby enabling provision for pooling funds for larger real estate projects to the sponsors. Furthermore, the modification in the regulatory structure enabling non-accredited investors to invest through real estate crowdfunding platforms has also boosted the growth of United States real estate crowdfunding market. The online platforms have further enhanced the accessibility of funds for the real estate projects around the clock and also at comparatively lower costs. For instance, Fundrise, LLC., an equity real estate crowdfunding platform, associates directly with the real estate developers and operators and have also integrated appropriate technology, which allows the firm to streamline and economize most of their operations, thereby enabling them to maintain a comparatively lower fee structure. A substantial increase in the investment volume from institutional investors is being observed in the region. Life insurance companies and pension funds amongst other institutional investors are increasingly investing through real estate crowdfunding platforms, which is further encouraging sponsors to use the tool for funding their large projects. Moreover, securing investment support from institutional investors is further providing the sponsors with an edge to obtain funds from small scale investors for their projects, thereby enabling them accessibility to funds within a small duration of time. Thus, online platforms are enabling sponsors to develop virtual pipeline of equity capital and influencing its adoption across them, which further indicates positive growth trajectory for United States real estate crowdfunding market over the forecast period.

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Growing prevalence of specialised online non-trade real estate investment trusts, eREITs, as an investment tool in the real estate sector is influencing the growth of United States real estate crowdfunding market. The instrument enables the potential investors to diversify their investment towards multiple real estate properties through a single investment. The market participants are specifically designing eREITs considering broad factors such as regions, asset types and investment styles. Such specialised eREITs allow the investors to exercise adequate control on the type of assets in which they would be investing. For instance, RM Technologies LLC. (RealtyMogul) offers public (non-traded) REITs, allowing the investors to choose from a variety of property types assuring them different return structures based on their selection of the specific REIT. The investment model is anticipated to gain traction over the coming years in the United States real estate crowdfunding market owing to the prevalent pandemic situation which has modified the investment scenario in the real estate sector, wherein individuals are keen to invest only into specific types of properties.

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The outbreak of the Covid-19 pandemic has brought about a challenging situation for sectors globally. Real estate sector too has witnessed a sudden pause in investments along with a marked decrease in commercial real estate investment transaction volume, as the pandemic has brought about uncertainties impacting the valuation of these assets. However, rental income from real estate properties have remained stable in this duration. Fundrise LLC, for instance, recorded an increased demand for properties which led to influential growth in the rental income, since a large section of the country’s population were inclined towards moving to Sunbelt cities such as Jacksonville, Dallas, Orlando, Nashville, Charlotte and Tampa. The company announced that the platform achieved a positive return of 2.41% during the first six months in 2020. Near term investments in the real estate sector during the prevailing condition showcases positive growth prospects for both, investors and real estate crowdfunding platforms. Moreover, it also projects opportunity for the sponsors to obtain capital through online crowdfunding platforms and proceed with further release of their real estate projects. Hence, similar prospects encompassing the real estate sector is anticipated to compliment the growth of the United States real estate crowdfunding market over the forecast period.

The detailed research study provides qualitative and quantitative analysis of the United States real estate crowdfunding market. The market has been analyzed from demand as well as supply side. The demand side analysis covers market revenue across regions. The supply side analysis covers the major market players and their regional presence and strategies. The geographical analysis done emphasizes on each of the major region across United States.

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United States Real Estate Crowdfunding Market:

  • By Type
    • Individual Investors
    • Institutional Investors
  •  By Property Type
    • Residential
    • Commercial
      • Schools
      • Hospitals
      • Shopping Centers
      • Industrial Buildings
      • Others
  • By Region
    • Northeast
    • Midwest
    • West
    • South

Get Full Information of this premium report@ https://www.absolutemarketsinsights.com/reports/Real-Estate-Crowdfunding-Market-2019-2027-358

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Press Release Provided By: Absolute Markets Insights