RealtyMogul.com has launched a non-traded real estate investment trust (REIT) that will be distributed exclusively online and aims to give small investors an entryway into the commercial real estate market.
MogulREIT I will be capped at $50 million and requires a $2,500 minimum investment.
The company credits the US Securities and Exchange Commission’s Regulation A+ as well as Title III of the JOBS Act for “leveling the playing field” by allowing non-accredited investors making less than $200,000 per year to access such investment vehicles.
“By investing in the ‘REIT,’ investors will gain access to a diversified pool of commercial real estate investments with one single investment,” the firm said in a statement.
The firm differentiated its cost structure with that of more traditional non-traded REITs. MogulREIT I entails no sales commission and offering expenses capped at 3 percent, while the former “employ a highly manpower-intensive sales method, resulting in upfront sales commissions of 7 percent, on average, and total expenses of up to 15 percent.”
The RealtyMogul.com team will take a “relatively conservative approach” when selecting transactions, investing in cash-flowing properties as opposed to land or ground up development. That will include multifamily, retail, self-storage and office.
“We’re looking forward to executing against our twofold objective for the fund: providing investors with both consistent cash distributions and the opportunity to benefit from potential appreciation in property values,” said company CEO Jilliene Helman. “Until recently, private investment markets have been off-limits to the majority of retail investors.”
In May, RealtyMogul.com surpassed $200 million in crowdfunded real estate equity and debt transactions. That included a $49 million bridge loan to fund Elite Street Capital’s acquisition of the Metropolitan at Buckhead, an apartment complex in suburban Atlanta, in November.