Introduction
In comparison to multifamily or commercial, Senior Housing can usually offer higher returns because it combines revenues from real estate and also revenues from added services. It has also outperformed other asset classes during historic periods of recessions. As such, it is an interesting asset class to consider investing in
With that in mind, COVID-19 has been detrimental to the Senior Housing Industry. The asset class was already experiencing early signs of oversupply during 2019 and as a result of COVID, new resident move-ins have slowed down dramatically. The growth of the sector was primarily driven by expectations of the baby boomer generation, born between 1946-1964, retiring and generating a rapid increase in demand. However, the increase in demand has been slow to arrive as the first set of baby boomers will first reach their 80s in 2026.
Transaction volumes as a consequence of default, short sales, and other financial difficulties have increased significantly, creating opportunities for new investment. The deteriorated state of the asset class may provide great opportunities to acquire assets at significant discounts to replacement cost and position them for future demand growth. With a 4+ year time horizon, those opportunities can result in outstanding returns.
None of the crowdfunding platforms have pushed this as a primary asset class. This deep-dive into the Real Estate Crowdfunding space looks to find out why.
| Platform | Vertical Focus | Minimum Investment | Type | Fee | Need to be Accredit Investor? | Blurb | Total Funding (Via Crunchbase) |
|---|---|---|---|---|---|---|---|
Crowdstreet | MultifamilyCommercial (Retail)IndustrialHospitalitySenior HousingMedical OfficesSelf StorageStudent HousingCommercial (Office) | $25,000 | eREITIndividualManaged | 0.50% to 2.5% for CrowdStreet funds; other fees vary by offering | CrowdStreet is a provider of online commercial real estate investment offerings and technology connecting investors with CRE firms. | ||
EquityMultiple | MultifamilyCommercial (Retail)IndustrialHospitalitySenior HousingCommercial (Office) | $10,000 | Individual | 0.5% on equity investments; other fees vary by offering | EquityMultiple focuses almost entirely on institutional commercial real estate, and it also offers equity, preferred equity, and senior debt investments. The company recently added tax-advantaged real estate investments (Opportunity Zone and 1031 exchange) and fund products to its lineup | ||
Fundrise | MultifamilyCommercial (Retail)Commercial (Office)Medical OfficesSingle Family | $1,000 | eREIT | 1% | Fundrise offers an alternative to investing in stock and bonds, the first low-cost, and direct private market investment built. | ||
RealtyMogul | MultifamilyCommercial (Retail)Commercial (Office)IndustrialSelf StorageMedical Offices | $5000 | IndividualeREIT | 1% to 1.5% | RealtyMogul is a marketplace for real estate investing, connecting borrowers, and sponsors to individual and institutional investors. | ||
DiversyFund | Multifamily | $500 | Individual | 2% to 8% developer fee. However, other crowdfunding platforms include these same fees as third party fees. | DiversyFund is a provider of a real estate crowdfunding platform used to simplify real estate research and investment process. | ||
AcreTrader | farmland | $3,000 | Individual | 0.75% annual management fee. Additionally, there are closing fees associated with each investment. | AcreTrader is an agricultural real estate investing platform that helps buyers to buy shares of farmland through an online platform. |