Property Biz Canada

Real Capital Conference: Panel on crowdfunding


Amar NijjarThe RealCapital 2016 conference was held at Metro Toronto Convention Centre and focused on commercial real estate key issues and trends. The conference brought together owners and investors with sources of public and private equity investment and debt financing in the Canadian real estate market.

Over 550 executives from across Canada attended but perhaps the highlight of the conference was a “forward looking” panel discussion on “Crowd Funding”. Online capital raises and “financial disintermediation” is here to stay. It’s not a matter of “if” but a matter of “how fast” and “how much”. Following themes were addressed in the session:

Technology is changing real estate The crowdfunding industry is at the forefront of this change. The panelists explained that crowdfunding platforms are taking full advantage of the efficiencies offered by technology and by big data.

Expect minimum investments to come down in the near future – Panel members argued that the low minimum investment requirement and transparency on crowdfunding platforms is vital for investors to properly diversify their portfolios. CF exemption is not expected to be used much.

Real estate crowdfunding offers several advantages to investors that REITs fail to offerOne of the most common questions we receive from potential investors is about the difference between real estate crowdfunding and REITs. Real estate crowdfunding (as compared to publicly traded REITs) is true diversification outside of the public securities market and investors get to select the deals they want to be in.

Real estate crowdfunding offers unique benefits to sponsors and developers – Many attendees at the meet up were potential sponsors seeking to learn more about crowdfunding as a source of capital for their deals. Crowdfunding allows real estate sponsors to tap a much larger base of investors to fund projects.

Securities Regime is our biggest challenge securities regime and its complex nature with 13 different provincial and territorial regulators is perhaps one of the single biggest challenges that portal owners will need to understand and learn to work with going forward.

Market Potential Untapped exempt market distribution in 2014 alone was around $120B and if RE crowd funding can tap in to even 1% of that – it will be a huge success.

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Amar Nijjar

About the Author ()

Amar is the Founder of R2 Capital & Investments. R2 is Canada’s leading Online Marketplace where investors can access Private MICs, Private REITs and Income Product and or Development LPs - all with the power of technology - bringing efficiencies and time/money savings into Private Capital Marekts. Amar has funded over $10 billion and underwritten over $25 billion of real estate during his career. Prior to starting R2, Amar led several senior roles at BMO, RBC, CIBC and most recently was Practice Leader and Executive Vice President at JLL (formerly Jones Lang LaSalle). He holds an MBA from York University and an undergraduate degree in chemical engineering.

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