Within the US, alternative finance marketplaces such as those for equity crowdfunding and P2P lending are quickly gaining traction among investors as accepted platforms to source new deals and investments. The trend occurs as regulatory and technology barriers have made it easier to launch low fee marketplaces that connect firms and individuals raising capital with investors.
As the market has grown, it is attracting a number of traditional financial firms to create marketplace versions of their offerings. Examples include venture capital funds that lead investment rounds on equity crowdfunding platforms, using the marketplace to increase the investment base of a round that they are participating in.
Following this trend, the latest example is the launch of a real estate crowdfunding platform by Origin Capital. An investment firm focusing on commercial real estate, Origin Capital manages over $400 million in assets. Launched in 2011, the firm has invested in 24 properties, of which its customers invested alongside Origin Capital in these deals. Deals are targeted to Origin Capital’s niche focus of multi-family and office assets in eight target U.S. cities including Chicago, Atlanta, Dallas and Charlotte. According to Origin Capital, since their launch, investments have provided an average rate of return of 25%.
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With the crowdfunding platform launch, Origin Capital is aiming to streamline its management services as the entire investment process goes online. As part of this process, customers will gain access to ongoing real time information of investment returns and property performance. The firm is also adding an online education center to assist investors to better understand the real estate sector.
Origin Capital is combining an established real estate investment platform with world-class technology
In addition, the firm is lowering its minimum investment threshold for accredited investors to $25,000, or 1/10th of previous levels. Launching the online platform, Origin Capital is aiming to target a wider investment base that it believes it can serve along with its existing investors of institutions, family offices and the company’s principals.
Commenting on the platform launch, Michael Episcope, Co-Founder and Principal at Origin Capital stated: “With Origin Capital’s investment in technology, we’re delivering an added layer of value to our clients. Origin Capital is combining an established real estate investment platform with world-class technology to bring real estate investments into the 21st century and deliver the most transparent, efficient real estate investment platform available.”