KBSDirect.com Launches $1 Billion No-Load Real Estate Fund on CrowdStreet Marketplace
PORTLAND, Ore., Feb. 22, 2018 /PRNewswire/ — CrowdStreet, provider of the leading commercial real estate investment platform for investor acquisition and relationship management, today announced KBS, one of the largest and most respected commercial real estate companies in the United States, has launched a new $1 billion “no load” and no upfront commission growth and income properties fund on the CrowdStreet Marketplace. KBS is offering its new fund, the KBS Growth & Income Fund, through both the CrowdStreet Marketplace and its own direct-to-investor platform at KBSDirect.com, which is powered by CrowdStreet technology. KBS is taking this unique omnichannel marketing approach to provide access and engage a wider array of accredited investors seeking institutional-quality investment opportunities managed by leading professionals.
The KBS Growth & Investment Fund was launched in beta last October through KBSDirect.com, and is the first offering in KBS’ 26-year history in which investors are able to directly buy shares online. KBSDirect.com increased the size of the fund to $1 billion and is now offering it on the CrowdStreet Marketplace, opening the opportunity to an even larger pool of investors who may have been interested in investing in institutional commercial real estate, but sought a smaller minimum investment amount and a desire to spread their investments across a growing portfolio of professionally managed assets.
“Commercial real estate investing is going through a dramatic transformation. For individual investors and the trusted advisors who serve them, real estate investing is moving from a fee-laden, high-load broker/dealer environment to one where online platforms support institutional-quality investments and aligned interests among the investor, the advisor and the fund, with lower fees, commissions and administrative costs,” said Peter Bren, chairman of KBS Realty Advisors and KBS Capital Advisors.
“This trend of direct investing through online platforms is delivering strong returns with greater transparency to investors nationwide,” said CrowdStreet CEO Tore Steen. “Our platform is on the leading edge of this trend. We enable top-tier commercial real estate firms, like KBS, to effectively take institutional investing online, both through their own branded channel, as well as using the additional channel of our Marketplace, which is experiencing 3x annual growth.”
“Launching the KBS Growth & Income Fund on the CrowdStreet Marketplace is an important part of our omnichannel marketing strategy to reach registered investment advisors, accredited investors and their financial advisors. It enables us to take advantage of new, proven distribution opportunities, while serving the real estate investment needs of the modern investor,” said Lew Feldman, president of KBSDirect.com. “CrowdStreet’s technology platform has enabled us to effectively incorporate an online function to communicate the legacy brand of KBS through content and education, to onboard and communicate with investors and registered investment advisors in a pleasant and secure user experience, to reach new distribution channels for no load and no commission KBS real estate investments, and to drive operational savings and economies of scale that will inure to the benefit of the investor and the advisor.”
With KBSDirect.com’s no-load approach, the company will not receive any of its incentive compensation until its investors have received a 100 percent return of their gross investment amount, plus 6 percent on their investment, ensuring that all of the investors’ capital will be invested directly in the Fund. The targeted average annual investment return is 10 percent to 14 percent at the property level, and the investment period is five to seven years, with a low minimum investor amount of $10,000. The Fund intends to generate both growth and income, and includes a monthly distribution paid to investors equal to a 5.5 percent annual rate of return on their investment. KBS, the parent company to KBSDirect.com, has a strong history managing institutional-quality commercial real estate assets. Since its inception in 1994, the company has managed $36 billion of income-producing real estate.
The KBS Growth & Income Fund currently owns four assets totaling $197.8 million in gross value all located in high job-growth markets:
- The Offices at Greenhouse, a 203,221 SF Class A office building in Houston, TX
- The Commonwealth, a 219,742 SF Class A office building in Portland, OR
- Von Karman Tech Center, a 101,161 SF Class B office building located in Irvine, CA
- 213 W. Institute, a 157,166 SF Class B office property in Chicago, IL
“The launch of KBSDirect.com is a new direction for innovative firms like KBS, and we are excited to lead the market in direct investment in institutional quality commercial real estate,” said Charles Schreiber, CEO of KBS.
“When the 11th largest global owner of office real estate commits to an online direct-to-investor capitalization model, it speaks volumes about the future of online syndication for commercial real estate,” said CEO Tore Steen. “The CrowdStreet and KBSDirect.com partnership signifies a massive shift in how commercial real estate will be accessed by investors in the future.”
The CrowdStreet platform has raised more than $260 million of equity to date, with nearly 200 total projects funded. In 2018, the company expects to fund an additional $300 million in equity on the Marketplace.
KBSDirect.com is an online portal that empowers accredited investors and advisors to invest directly in professionally managed institutional-quality real estate portfolios with access similar to KBS’s institutional investors and partners. KBSDirect.com’s first direct share offering is KBS Growth & Income REIT, a $500 million offering conducted under Rule 506(c) of Regulation D. Investors pay no up-front sales commissions and all investors’ funds go directly into real estate. KBS Growth and Income REIT is sponsored by KBS, which formed its first investment advisor in 1992 and is ranked by National Real Estate Investor as the 11th largest commercial real estate company in the United States as of April 20, 2017.
CrowdStreet is a financial technology (fintech) company that is transforming the $15 trillion U.S. commercial real estate industry through its innovative and integrated approach to online fundraising and investor lifecycle management. CrowdStreet solutions allow real estate developers and operators to accelerate their fundraising processes while achieving enhanced visibility and control over all aspects of investor relations and lifecycle management. Sponsors are able to use the CrowdStreet Marketplace to gain instant access to a nationwide audience of accredited investors. Enterprise-level sponsors are able to present investment offerings to their existing investors under their brand and through their own website by deploying CrowdStreet Sponsor Direct. Both solutions democratize access to commercial real estate investment opportunities by connecting accredited investors, family offices and institutions directly with real estate sponsors for no-fee co-investing with a modern digital portfolio management experience. Headquartered in Portland, Ore., CrowdStreet was founded in 2013 by a senior leadership team with over 80 years of combined experience in commercial real estate, software development and private equity. For more information, please visit www.crowdstreet.com.
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