CrowdStreet
CrowdStreet

Two ways to get paid with commercial real estate.

Email sent: Apr 13, 2020 1:07pm
You can potentially earn long and short-term returns depending on your investment.

CrowdStreet Investors Have Earned
More Than $120 Million in Distributions

 

Most of CrowdStreet’s deals target a 5+ year hold and are illiquid investments. So unlike stocks, you can’t withdraw your investment until the property exits. However, commercial real estate can generate both short-term cash-flow and long-term returns for investors. This means there are two ways to get paid during that multi-year hold.

 

Distributions

 

Some properties generate monthly or quarterly distributions, also known as cash flow, through rent payments or other income.

For instance, some properties are already fully leased by quality tenants and generating stable cash flow. Other properties, on the other hand, might require significant upgrades or renovations, which can cut into the owner's cash flow.

Exits

 

For many investors, the big payday is when the investment is fully realized, meaning the property sold or refinanced.

Opportunistic deals, like ground-up developments, will likely not generate much (if any) cash flow if the property doesn't have renters, but investors may receive a large payout when the property eventually exits.

To date, 26 CrowdStreet deals have fully-realized, resulting in an

average 28.5% IRR* and 1.58 equity multiple for investors.

$1.1MM Invested
MS_Bloomington_rendering-1

Bloomington

Mainstreet

Actual Return: 14.8%

$2MM Invested
timber_oaks

Timber Oaks

Windmill Investments

Actual Return: 19.9%

$4.5MM Invested
Oakland_airport-1

Oakland Airport Plaza

Vertical Ventures

Actual Return: 44.8%

View our Marketplace performance page for more details.

 

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With regard to realized deals, the term “Internal Rate of Return” means, with respect to the investors in the realized deal, the discount rate, using cumulative annual compounding, at which the net present value of the total of the investors’ (a) aggregate capital contributions to the issuer of the realized deal and (b) aggregate distributions from the issuer of the realized deal, equals zero, and calculated for each such capital contribution from the date the offering was removed from the CrowdStreet Marketplace (the “Marketplace”) and from the date such distribution, as applicable, was made. The calculation of an Internal Rate of Return was determined by using the XIRR function of Microsoft Excel.It is important to note that most of the 385+ investments on the Marketplace are still in their holding periods. The 23 fully realized deals represent a small portion of total deals on the Marketplace, and it may be more likely for deals that realized early to have experienced a high value exit and for deals that are not performing well to be delayed in their realization. Accordingly, the performance information to date may not be an accurate indicator of overall Marketplace performance. Furthermore, CrowdStreet is not responsible for the performance of deals on the Marketplace, and past performance is not indicative of future results.

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