US property crowdfunding platforms to benefit from Regulation A+

on Mar 26, 2015
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Last year, about $10.4 billion worth of investments in the real estate world were made via property crowdfunding. And this new phenomenon is only set to grow stronger, with many suggesting that investments this year could double the amount seen in 2014.

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That estimate doesn’t appear to be so hard to reach when you consider the amount of property crowdfunding platforms that are already available – and the ones that are poised and waiting in the wings to launch. With more and more interest being garnered in the area, investors and companies alike are taking advantage of the newest way to invest in property.
And it seems as though US property crowdfunding platforms are now set to take advantage of a new set of rules relating to Title IV of the Jumpstart Our Business Startups (JOBS) Act, otherwise known as Regulation A+ (Reg A+). The US Securities and Exchange Commision (SEC) voted unanimously yesterday in favour of adopting a rule set designed to help small businesses raise capital through smaller and medium-sized public stock offerings. The new rule implemented by the SEC will raise the amount of money that companies can generate in Reg A+ stock deals from $5 million to $50 million annually.
This ruling will give smaller companies the opportunity to grow at a much faster rate. Asset management company Allegiancy, plans to be one of the first businesses to offer $20 million in preferred equity securities under the new Reg A+. There are an estimated 27.1 million private companies in the US whose ability to access capital markets will be made much easier.
With property crowdfunding still being relatively new to the real estate world, many platforms are still very much unrecognised due to their inability to generate a considerable amount of growth. However, with Reg A+ in place, property crowdfunding in the US can now potentially expand above and beyond the aforementioned predicted investments for 2015.

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