CrowdStreet, Inc, an award-winning1 online real estate investing platform, announced it will be launching its new broker-dealer model in the coming weeks. This milestone marks the culmination of a multi-year process to transform from an online marketplace to a financial institution and represents the next phase in CrowdStreet’s evolution. As a FINRA-registered securities broker, CrowdStreet Capital LLC will offer new products and services that directly benefit investors. Since its inception, CrowdStreet has provided access to a range of high quality investment opportunities and online tools needed to manage those investments, which traditionally have only been attainable for institutional investors and ultra-high-net-worth individuals.
In conjunction with this multi-year effort, CrowdStreet has released several new enhancements:
- Escrow Account Funding – Ensures secure oversight and control over investor funds. As of June 5, 2023, all CrowdStreet single-sponsor deals are funded through third-party escrow accounts. Investors’ funds are released only upon confirmation of closing milestones.
- Individual Accreditation Verification – Saves investors time and extends their status as verified accredited investors. The new internal service eliminates the need for investors to seek verification from a third-party and extends the validity of verifications from 90 days to one year.
- Operational Improvements – Increases investor protections and improves service. Providing additional review, vetting, and approval processes for sponsors and deals. This includes new and more rigorous diligence requirements, review of offering materials, confirmation of final loan documents prior to releasing escrow, examination of all closing documents with a closing attorney, more robust security infrastructure, and the addition of a licensed Investor Relations staff.
Along with this new broker-dealer designation, Jack Chandler will join the Board of Directors and serve as interim CEO to oversee the company’s transition and growth into a financial institution. Chandler was formerly a Managing Director, Global Head, and Chairman of Real Estate at BlackRock, after a 25-year career with LaSalle Investment Management. Current CEO Tore Steen will continue to serve on CrowdStreet’s Board of Directors.
Chandler has served as a strategic advisor to CrowdStreet and as a member of the Investment Committee for CrowdStreet Advisors2 since 2020, during which time CrowdStreet launched more than 20 investment funds and secured its FINRA broker license. “My career has been focused in commercial real estate, an alternative asset that has proven over time to be one of the best ways to diversify investment portfolios and build wealth,” said Chandler. “I’ve advised CrowdStreet’s leaders for more than three years and have seen the value the platform delivers to investors and sponsors. The company’s mission has been and will continue to be to provide investors with the best online real estate investing experience, with tools and resources typically reserved for an institutional audience. Our evolution to a registered FINRA broker-dealer allows us to do that even better.”
“As an early investor in CrowdStreet, I’ve seen the company transform from a pure software and marketplace company to one that offers its own solutions, funds, and privately managed accounts. After earning FINRA’s designation in 2022 and after more than a year of implementing new operational standards, we’re excited that investors will soon experience our new-and-improved offerings as a broker-dealer,” said Dino Vendetti, a member of CrowdStreet’s Board of Directors.
This new phase represents a significant step forward in the evolution of CrowdStreet. More updates and enhancements will be coming in the next several weeks.
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