The Real Deal Miami

Developer launches new crowdfunding platform in Miami

Metronomic is raising funds for two projects in Little Havana and Coconut Grove

February 15, 2016 03:00PM
By Sean Stewart-Muniz

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Renderings of Metronomic's Grove Haus (left) and Plaza Celia projects in Miami

Renderings of Metronomic’s Grove Haus (left) and Plaza Celia projects in Miami

Metronomic, a development firm based in Coral Gables, has launched its own crowdfunding web platform in hopes of cashing in on the financing craze that’s blooming in South Florida.

The company began its foray into crowdfunding last year with its Villas Beny Moré project in Little Havana. Planned to have only six townhouses, the project was opened for public fundraising on a third-party website with a goal of $350,000. That mark was met within 10 hours, Metronomic president Ricky Trinidad told The Real Deal.

Seeing that success, Trinidad and his firm decided to create their own platform to raise funds for future projects.

“Every developer out there from Donald Trump to Jorge Perez needs equity capital,” he said. “The more equity you can raise the more projects you can do.”

The firm is currently marketing two projects for crowdfunding: GroveHaus, a small rental community in Coconut Grove, and Plaza Celia, a mixed-use project with residential and retail components in Little Havana. Both are expected to break ground early this year.

How it works: Metronomic identifies a development site and starts marketing it on its crowdfunding platform. Once the dollar goal is reached, the firm closes on the land as well as financing from a private lender. Construction takes place over the next 12-16 months and the crowdfunders receive an expected 20 percent gain, Trinidad said.

The Securities and Exchange Commission opened the real estate community to crowdfunding in 2013 with the JOBS act, which allowed developers to blast out fundraising solicitations to the public — with one catch. Investors had to be accredited, meaning they have a net worth of $1 million and up, or bring in $200,000 a year. More than a hundred crowdfunding platforms formed in the act’s wake, with hundreds of millions of dollars in fundraising flowing toward real estate projects.

The SEC has since relaxed those restrictions to allow practically anyone to invest in a crowdfunding venture without accreditation.

Trinidad said crowdfunding is a win-win for both developers and members of the communities where their projects are being built. Residents of Little Havana, for example, can take part in Metronomic’s new projects, while the developer accumulates financing.

Metronomic was originally founded in Chicago during the recession year of 2008, Trinidad told TRD. Its focus was on infill projects that turned out market-rate rentals, both on the commercial and residential sectors.

Once the real estate market turned around in 2012, Metronomic moved its headquarters to Coral Gables and began working mostly on small apartment buildings — typically between six and 30 units — in neighborhoods like Little Havana.

Metronomic certainly isn’t the only company in South Florida looking to capitalize on the crowdfunding movement. Acquire Real Estate, a New York firm, takes a slightly different approach.

The company puts up its own equity to buy a piece of a property from its owner, then offers that piece to investors on its crowdfunding platform. Its most recent deal was to buy $369,000 worth of the $52 million Pompano Marketplace shopping center and split it among more than a dozen investors.

“We have the ability to reach people that aren’t in our close network of friends or colleagues,” Greg Shugar, Acquire’s chief marketing office, told TRD in December. “It’s just modernizing the real estate industry.”