Financial advisors know the value of presenting clients with alternative ideas and asset classes beyond traditional bonds and equities. When it comes to real estate, Texas-based CrowdStreet Advisors helps advisors deliver growth-oriented private commercial real estate opportunities to clients without the responsibilities of direct property ownership.
Over the past eight years, the CrowdStreet Marketplace has listed over 650 real estate projects, across a broad range of property types, developers, and markets. Now, CrowdStreet Advisors, a wholly owned subsidiary of CrowdStreet, is creating a way for advisors to offer their clients a professionally-managed option for investing in these opportunities...
For advisors, part of the good news when evaluating opportunities available through CrowdStreet Advisors is that the concept of private commercial real estate isn’t typically a complex sell to clients. Owing to years of low interest rates, many individuals establish basic familiarity with public, or listed, real estate investing assets. Some even possess familiarity of advanced concepts, such as industrial, multi-family, office and retail real estate investment trusts (REITs).
Private commercial real estate (CRE) is an increasingly relevant asset class and while it’s not necessarily complex, it is expansive, underscoring the benefits of CrowdStreet’s broad network of developers, detailed investment review, and selection process, and their team’s experience.
CrowdStreet Advisors Brings CRE Growth Opportunities to Advisors
Since forming, CrowdStreet Advisors, which has north of $400 million in assets under management (across funds and managed accounts), has launched over 20 different funds, including its first REIT in early 2022. Funds are meant to provide an easy option for investors interested in the asset class but without the expertise, resources, or network needed to source, select, and manage these types of investments over the full investment cycle.
"CrowdStreet Advisors is focused on making it easy for financial advisors to provide their clients with an investment that’s different from their existing core real estate holdings, and complementary, to help them further diversify their portfolios and meet their financial goals," according to the firm.
CrowdStreet Advisors essentially uses their access to the marketplace deal flow to hand-select the projects they feel are best suited to meet the investment objectives of the funds they manage. This also provides them with the ability to build custom funds or managed accounts based on specific investment criteria selected by the advisor and their clients.
CrowdStreet Finds Sweet Spots
When it comes to investing in private commercial real estate, vetting and selecting the deal sponsor is as important as reviewing each project and business plan. That's where CrowdStreet Advisors benefits most from being a part of CrowdStreet Inc.
According to CrowdStreet, since inception, they evaluated over 5,500 real estate projects for their individual Marketplace and approved 650+1 deals, or less than 7%. For its funds, CrowdStreet Advisors has selected only the top 3% of all potential opportunities, with C-REIT and thematic funds investing in just 1.2% of the overall projects evaluated2—an indicator of its selective process.
The firm has also built a network of over 300 regional investment sponsors and operators that not only provide access to projects but provide access to proprietary data and real-time market insights. Every year the firm publishes a Best Places to Invest report as well as an updated Investment Thesis providing their latest thinking on private commercial real estate investing. Their Office of the CIO also publishes a steady stream of educational articles and insights to help advisors stay informed about CRE and its role in client portfolios.
To learn more about CrowdStreet Advisors visit www.crowdstreetadvisors.com.
CrowdStreet, Inc. (“CrowdStreet”) offers investment opportunities and financial services on its website. Broker dealer services provided in connection with an investment are offered through CrowdStreet Capital LLC (“CrowdStreet Capital”), a broker dealer registered with FINRA and a member of SIPC. Advisory services are offered through CrowdStreet Advisors, LLC (“CrowdStreet Advisors”), a wholly-owned subsidiary of CrowdStreet and a federally registered investment adviser. CrowdStreet Advisors provides investment advisory services exclusively to privately managed accounts and private funds and does not otherwise provide investment advisory services to the CrowdStreet Marketplace or its users.
Investing in commercial real estate entails substantive risk. You should not invest unless you can sustain the risk of loss of capital, including the risk of total loss of capital. All investors should consider their individual factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. An investment in a private placement is highly speculative and involves a high degree of risk, including the risk of loss of the entire investment. Private placements are illiquid investments and are intended for investors who do not need a liquid investment.
All information provided in this article has been prepared solely for informational purposes and does not constitute investment, legal, or tax advice, or an offer to buy or sell any security or investment product. The information contained herein has been obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness.
Related: Diversify Client Portfolios Through Commercial Real Estate with Sheldon Chang
1 1: Represents prospective projects reviewed since 2019 as of July 2022. Prior data from CrowdStreet’s inception from 2014-2019 is not available.
22: Represents % of deals approved for all CrowdStreet Advisors Funds, including CSBP (algorithm-based). Excluding CSBP, only 1.2% of prospective deals were approved for fund investment.