Real Estate Crowd Funding Emerging as Strategy to Acquire Shopping Centers

A new Los Angeles-based online real estate crowd funding company, Realty Mogul, has emerged as a new option for investors to obtain the necessary funds for commercial property purchases.

The company allows like-minded investors interested in private real estate investments to pool funds to raise equity capital needed to complete purchases. The Barstow Shopping Center in Barstow, California recently sold for $8 million. U.S. Realty Partners (based in Westlake Village, CA) and Compass Acquisition Partners (based in Woodland Hills, CA) sponsored the shopping center purchase. Both were able to raise $760,000 in equity capital using Realty Mogul’s online service. The service requires a minimum equity offering of $5,000 for the crowd funding pool.

U.S. Realty and Compass plan to improve the 110,100 square foot shopping center before eventually reselling it. Both firms will work with local leasing agents and a property management firm to maintain the property. Part of a repositioning strategy, the sponsors will handle minor enhancements to the center’s façade and lease-up before placing it on the market. The center’s main anchor is a Vons Supermarket. Other tenants include a 99 Cents Only store, Big 5 Sporting Goods, Radio Shack, and Allstate Insurance.