Real estate crowdfunding found its way to North Las Vegas with the purchase of the Cheyenne Airport Center by Rising Realty Partners.
The Los Angeles-based real estate investment company reclaimed the industrial park next to the North Las Vegas airport late last month and raised funds for the purchase through two crowdfunding platforms, RealtyMogul and its own Rising Investor platform.
Ownership records show the 10.1-acre site was purchased in Newport Beach, Calif., By BKM Capital Partners for approximately $ 20.8 million.
Rising Realty co-founder and CEO Christopher Rising described the deal as one that required his ego to be left at the door.
“For an established developer to turn to crowdfunding, there are a lot of psychological hurdles to overcome, but we just feel like it’s the future,” he said, adding that his colleagues often scoff at the idea of crowdfunding for a property. . “We want to be at the forefront, so we are willing to take risks and do it, and it has proven to be very effective.”
Crowdfunding isn’t a new concept – think of the popular fundraising platform Kickstarter – but it’s an investment structure that continues to gain traction in the real estate industry, including in Las Vegas.
“Crowdfunding allows small investors to diversify their investment portfolio without needing to raise millions of dollars,” said Amy Ogden, vice president of Logic Commercial Real Estate. “Although this is still a relatively new process in our valley, there is so much institutional capital coming in, we have yet to see this type of buyer emerge in a consistent fashion. “
Rising Realty is known to have acquired a number of office buildings in downtown Los Angeles, such as the $ 460 million acquisition of One California Plaza with Colony NorthStar.
But this latest purchase is the company’s first asset in Nevada and the second industrial building in its portfolio totaling nearly 5 million square feet.
Rising said it was his first time working with RealtyMogul, an online real estate crowdfunding platform for individual investors looking to put their money into commercial real estate.
The company’s RealtyMogul listing for Cheyenne Airport Center showed the minimum investment to be $ 35,000 with a three-year retention target. Rising has raised its investment target to $ 7.58 million, according to the listing. Rising said it also used the company’s internal crowdfunding platform to raise additional capital for the purchase.
“We did it faster and raised more money than we thought,” said Rising. “I think people like the diversification and the ability to own a small portion of an industrial asset in a large market.”
Las Vegas has ticked many boxes for Rising Realty, after announcing plans in recent years to expand its footprint outside of California and into other assets such as industrial and multi-family properties.
“We believe in the growth thesis in Las Vegas because of the state’s tax structure compared to California,” Rising said. “It’s a very friendly business environment. For us, being in the industry is really important, and it’s an asset class that we want to develop. We believe that buying from a place like Las Vegas – there is more to come there.
Ogden said the Las Vegas Valley industrial market has become one of the hottest in the Western region.
She said there was more than 2.4 million square feet of net absorption in the second quarter, the highest since the fourth quarter of 2017.
“This market attracts many massive e-commerce companies and other logistics companies setting up regional distribution facilities, which in turn creates a captive audience in the investment arena,” Ogden said.