How will Blockchain Technology Impact Real Estate Crowdfunding?

Lonnie Halpern, Partner

I was thrilled to see so many real estate crowdfunding platforms in attendance at the IMN Middle-Market Multifamily Conference earlier this month. I believe that the increased adoption of real estate crowdfunding highlights a real need for alternative equity raising strategies in the commercial real estate space. Ever since the JOBS Act was signed into law in 2012 (making advertised private placements and crowdfunding possible), I have been intrigued by how real estate crowdfunding would affect the real estate industry and have been following this space very closely.

Recently, I have witnessed a new trend. The arrival of numerous blockchain technology based companies working to provide a solution for real estate equity raising through “tokenizing” real estate, creating digital representations of assets which then can be sold (either entirely or in portions) via the blockchain. These “Real Estate Crowdfunding 3.0” companies face many of the same challenges as their predecessors, including how to facilitate adoption, how to scale, and how to navigate the securities laws. Looking forward to seeing how this new chapter of real estate crowdfunding evolves.