Before the coronavirus, shifts in market
conditions, technology and borrowerpreference were impacting capital markets.
Now, it’s a different scene altogether.
BY LES SHAVER
IS THE CRE FINANCEREVOLUTION OVERALREADY?
The deal itself was nondescript. In January of this year, a buyer paid $445,000 for unit 1805 in the Reach at Brickell City Centre in Miami, which Swire Properties developed.
The mystery wasn’t in the purchase itself. The intrigue was in thebuyer. It wasn’t a Manhattanite seeking a place to stay warm in the winteror a foreigner seeking to park money in the US.
In fact, the buyer wasn’t an individual at all. It was approximately 100investors who came together on Compound—a global real estate investment marketplace that connects retail investors through an app andallows them to pool their capital to buy apartments.
Investors can get in for as little as $50, though the typical investment ismore like $5,000. “Because of that low minimum, we’re working withpeople who have historically been shut out of this space,” Janine Yorio,CEO and co-founder of Compound told us earlier this year.
“Our product allows a greater universe of people to participate in thisunique wealth creation opportunity, which is owning the housing stock inthe markets where people are moving to and jobs are being created,” shesaid at the time.
That was then.
As the coronavirus began its ransacking of the US economy, Compoundbegan to pivot.
“Although this crisis is unlike anything we’ve seen before, we alreadysee familiar patterns emerging—and we’re doing everything in ourpower to use them to our advantage,” Yorio told us in a follow up.
Compound sees an opportunity to become a dominant distressed realestate investment platform for retail investors, she explains. Unlike otherretail real estate investment platforms such as Fundrise, Cadre andCrowdstreet, Compound does not have a large legacy portfolio to unwindor explain, according to Yorio. “This represents an enormous opportunity for our company and for our investors,” she says.