CrowdStreet launches e-commerce property fund

JLL said demand for last-mile real estate to surge by 1 billion square feet

CrowdStreet CIO Ian Formingle and CEO Tore Steen (CrowdStreet)
CrowdStreet CIO Ian Formigle and CEO Tore Steen (CrowdStreet)

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.

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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.