right to left Michael Stoler, Robert Verrone, Robert Lapidus, Richard Mack, and Ofer Yardeni

right to left Michael Stoler, Robert Verrone, Robert Lapidus, Michael Maturo, and Ofer Yardeni


Went to the AmTrust North America Real Estate Summit today, where I saw Gentry Hoit of GreenOak Real Estate in the audience and heard Ofer Yardeni of Stonehenge NYC, Michael Maturo of RXR Realty, Robert Lapidus of L&L, and  Robert Verrone of Ironhound Management discuss a wide range of topics under the moderating influence of Mike Stoler of Madison Realty Capital and the Stoler Report (he did a great job, getting the speakers excited with question after question without drawing attention to himself.)

Toward the end of the session, Stoler asked the panelists about crowdfunding, which sparked a debate that I would have liked to join, but it was a big group and speeches from the audience would not have been welcome (but I’ll make one here based on my close association with RealtyShares)

Verrone kind of grabbed the mike at first and essentially said that individuals are better off buying SL Green Realty Corp. or a REIT ETF. He said that crowdfunding investors won’t get a better return, but will have a better story to tell their friends.

Yardeni was a bit more thoughtful in my opinion. He said he thought crowdfunding would be a revolutionary as the internet, and asked the audience what they thought would happen if Warren Buffet or Larry Silverstein syndicated an investment online and regular folks could invest alongside. Yardeni did express concern about illiquidity for crowdfunding investors.

I am understating the heat between these two, which was friendly but palpable.

Michael Maturo analogized from experience, describing a private REIT that he had launched that allowed moms and pops (accredited moms and pops, I’m assuming :) to invest alongside the international institutional LP base that RXR attracts. It sold in New York and California but failed to get traction elsewhere. He didn’t explicitly make this connection, but I think meant to say that crowdfunders might find the (perceived) lack of Red State sophistication to be an impediment to growth.

So in response to Verrone, I think he made a pretty common mistake with technology analysis which is that if you change one aspect of a transaction with technology, everything else will stay the same. In fact, RealtyShares and their competitors are changing everything. An investor who buys into “that building” online, knows exactly what he owns without wading through a dense 10K and has control over the next building he or she buys. In addition, because of potentially superior use of technology and lower costs, RealtyShares has the potential to access smaller transactions, outside the Gateways, and with less well-known sponsors, and these transactions have the potential to pay a premium return over Trophies on Fifth Avenue. Finally, CRETech firms are transforming every aspect of investing, managing, and reporting in ways that I can’t talk about but which is changing everything about how we invest and will invest.

In response to Yardeni’s concern about the secondary market for individual investors buying online, I think that in the near future one of the crowdfunders will offer secondary market in these illiquid private investments. I think the bid-ask will be pretty wide, and volume low at first, but who better to solve the problem of connecting buyers and seller of illiquid private syndicated interests than the crowdfunders who invented the online syndication in the first place? (Thoughts are my own, and I am not recommending an investment).

Note: an earlier version of this article attributed Michael Maturo’s comments to Richard Mack of Mack Real Estate Strategies. While my error was due to an error in the program listing, I regret the misattribution.

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