Investments in real estate have traditionally been a hedge against inflation as prices of properties increase, rental income increases, and the cost of replacement or substitutes also increases. As we move into an inflationary scenario, shrewd investors are seeking out opportunities to preserve the value of their capital and increase investment income to keep pace with the declining purchasing power of their capital. EquityMultiple is a real state investment platform that provides accredited investors with opportunities to invest in commercial real estate ventures with as little as $10K. Investors can invest in one of three ways: fund investing, which covers multiple assets and invests in debt, equity, and securities, direct investing into distinct projects, and tax-deferred investing for those that want to delay tax liabilities from recent capital gains. EquityMultiple performs extensive due diligence on every project and the sponsors on the platform, only listing 5% of the deals evaluated.
AlleyWatch caught up with Cofounder, CIO, and Head of Real Estate Marious Sjulsen to learn more about how EquityMultiple is making commercial real estate investments more accessible, the company’s strategic plans, and much, much more.
Tell us about the product or service that EquityMultiple offers.
EquityMultiple offers investors access to professionally vetted real estate and end-to-end asset management. Through unparalleled access to quality alternative investment opportunities, we allow accredited investors to create individualized portfolios across asset types and geographies all for a fraction of the traditionally prohibitive capital entry point.
What inspired the start of EquityMultiple?
Historically, investing in commercial real estate has been reserved for the ultra-wealthy and connected. If you didn’t fit this narrow silo, you would never even gain visibility into the kind of investment opportunities that institutional investors have been able to profit from tremendously. EquityMultiple was founded to marry tech with institutional CRE investment practices, taking huge upfront capital requirements and “who you know” out of the picture to make these investments accessible to any accredited investor.
How is EquityMultiple different?
We don’t think of ourselves as a crowdfunding platform or a marketplace, we treat every single investment made on our platform as our own and provide end-to-end asset management. We put significant resources towards making sure our customers’ returns are maximized and that they are relieved of any coordination or back and forth with other project stakeholders. We are focused on providing investors a great experience and transformative diversification options.
What market does EquityMultiple target and how big is it?
EquityMultiple is open to any accredited investor. According to the Federal Reserve’s 2019 SCF data, there are over 13 million accredited investors in the United States and growing.
We offer our customers the opportunity to invest in commercial real estate deals on a fractionalized basis, allowing them to better diversify their portfolios. We provide developers and sponsors access to an enormous, previously untapped retail market and we provide investors with customized support of their investments and portfolios.
How has COVID-19 impacted the business?
We have continued to see strong growth over the past year, from both accredited investors in light of stock market volatility (and a consequent need for diversification) as well as increased demand from developers who continue to seek capital in the absence of more traditional “country club” methods. To date, we have delivered over $60 million in distributions to our investors and have facilitated investment in real estate accounting for over $3 billion in total asset value.
What are the milestones you plan to achieve in the next six months?
We have aggressive goals to grow our investment pipeline, make key hires, and introduce innovative new features within our technology stack. New opportunities should emerge at greater volume across the U.S. over the next several quarters as asset markets recalibrate, and our model positions us to offer a broad set of real estate investment opportunities to our investors. We are looking forward to introducing a number of exciting new tools within our platform as our investors further diversify.
What’s your favorite outdoor dining restaurant in NYC
I’m still waiting for heated seats to become more de rigueur in NYC but I reside in Brooklyn, so my favorite spots are local spots in the neighborhood like Walters or Colonia Verde.