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US Passive Real Estate Crowdfunding Platform For Global Investors Is Launched
Eliane Chavagnon
3 December 2014
RealtyWealth.com has launched a US passive real estate crowdfunding platform for foreign investors with at least $5,000 to invest. Targeting accredited investors in the US and global investors in South Africa, China, the UK, Canada and India, RealtyWealth.com invests in corporate-backed, long-term lease properties from credit-rated tenants such as McDonalds, Walgreens, Starbucks and Walmart. The US- and South Africa-based firm said the last six months have seen significant developments within the real estate crowdfunding market, with $700 million having been raised by real estate tech startups since 2012. Citing Real Analytics, it added that Chinese investments in US commercial properties have jumped ten-fold from 2012 to 2013 and are expected to reach $10 billion by end-2014. Single tenant net lease (STNLs) – and in particular triple net lease (NNN) – investments offer investors a “hands off” passive investment consisting of long-term leases that are guaranteed by the corporate tenant. The firm noted that while ultra high net worth individuals, family offices, hedge funds and REITS have “been taking advantage of these investments for decades”, less than 10 per cent of the 8.7 million accredited investors in the US are “aware of the merits of these real estate investments”. The firm believes it is changing the landscape by making investing in this area "simple and more affordable". Bryan Smith, co-founder and chief executive of RealtyWealth.com, explained that the NNN investment is “essentially a corporate bond-type investment in a real estate wrapper.” “Compare investing in Starbucks stock at 1.6 per cent dividend with the market risk involved versus acquiring a corporate backed Starbucks lease and achieving returns of 6 to 7 per cent unlevered,” he said.