UPDATED: Nov. 9, 9:15 p.m.: To meet the surge in demand for last-mile real estate, CrowdStreet is launching an e-commerce property fund.
The Portland, Oregon-based crowdfunding platform said the $20 million to $30 million fund will target warehouses, distribution and data centers, and logistics and last-mile properties. It aims to invest in projects with a total capitalization of $400 million.
“When the pandemic hit, we watched e-commerce sales spike,” said Ian Formigle, CrowdStreet’s chief investment officer, characterizing logistics-focused real estate as “grossly undersupplied.”
According to JLL, e-commerce sales are expected to hit $1.5 trillion by 2025, boosting demand for industrial real estate by 1 billion square feet. Sales of logistics and last-mile warehouse space rose 14.9 percent year-over-year in 2019 — and that was before Covid.
“We want to work with groups that can fill that void,” Formigle said. CrowdStreet’s equity fund will target ground-up projects and acquisitions and it will be managed through CrowdStreet Advisors, the company’s registered investment advisory service.
Founded in 2012, CrowdStreet launched its online marketplace in 2014. It is one of several crowdfunding platforms that launched after a change in U.S. securities law made the sector more accessible to a wider pool of investors.
CrowdStreet says that 80,000 investors and 250 developers have used its platform, and in February it said it surpassed $1 billion raised for commercial real estate deals. In 2019, CrowdStreet raised over $500 million, including $10 million for a 349-room Hilton in downtown Chicago.
In all, CrowdStreet has closed nine funds, including seven “blended portfolio” funds that take an index approach. Last year, CrowdStreet launched a $20 million Opportunity Zone fund, and this summer, it closed a $16 million distressed fund.
Formigle said the fund is already 50 percent committed, and CrowdStreet plans to launch a second distressed fund in early 2021.