Ian Formigle: “Overnight” Success — The 7-year Process Leading to Crowdstreet Placing $1B of Equity in 2021.

Ian Formigle, the Chief Investment Officer of Crowdstreet joins us on this episode. Speaking about their 2013 startup through today, where CrowdStreet has become one of the preeminent crowdfunding platforms in the Nation, Ian shares a ton. The platform has done nearly 500 deals and invested $1.3B in multifamily, build-to-rent single family, industrial, hotel, office, and retail.  They invest capital across the entire risk spectrum from joint venture equity to pref. equity, mezzanine debt, and even senior loans. At Crowdstreet, there are over 50,000 investors on the platform, the average deal falls right at $40MM, and the average investment at $50k.

From a team of four original members, Ian helped build the platform to well over 30 people and watched the company really thrive.  Ian’s a very astute investor with an incredible grasp on the texture and nuance of commercial real estate investing on a national scale.

As the single team member charged with making the go/no-go investment for the platform, Ian brings forward a ton of insight.

Key takeaways in the episode:

  • Multifamily and Industrial remain strong. 
  • The implications of monetary policy will be cap rates compression.
  • Today, to manage risk, you need bet on the long-term market and underwrite to normalcy after the pandemic.  Look at basis and the costs to “clear the chasm” to assess investment viability.
  • Build to rent is here to stay.
  • The overweight to commercial real estate as an asset class will continue and that will provide tail winds for the incumbent investors.
  • When you start a company, know that the demand is there, and that the market is growing. Get that right, at least.
  • Build a team that fills in where you are weak.  Cover the corners of the company’s needs with other’s skills.
  • Crowdfunding’s impact promotes the promise of greater capital efficiency.
  • Be tenacious and do not be afraid to fail; get up and carry on.
  • Tenacity inspires the team.

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Episode 6 of Offshoot brings long-time friend and acquaintance, Andrew Jobst onto the show. Andrew is a principal of HG Capital. Andrew is unquestionably one of the most intelligent and highly educated people I engage with on a recurring basis. He is involved in all aspects of the Fund’s operations including originations, joint venture negotiations, and asset management & disposition.
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