Peek Inside The Data: RealtyShares Shows Crowdfunding Is Taking Off In California

Californians are embracing crowdsourced financing for real estate development, according to data released by the online marketplace RealtyShares.

Borrowers across the state used the platform to successfully raise more than $53M for 90 projects, including residential fix-and-flips, multifamily and commercial value-add development.

Much of the San Francisco-based company’s growth in California came from the greater Los Angeles area. LA accounted for nearly 55% of the dollar volume funded through the platform. San Francisco ranked second with 33% and Sacramento followed with 7%.

RealtyShares director of equity investments Brian Esquivel (above) tells Bisnow the company was careful to balance growth while ensuring the strength of underwriting criteria remained a top priority. "Our focus at RealtyShares is very much on the long-term sustainability of our company,” he says. “To endure cycles we need to be very diligent in efforts to vet both our operating partners and the prospective investment opportunities.”

The online marketplace screens both debt and equity investments before offering them to a network of 20,000 accredited investors. RealtyShares maintains an in-house investment team that has to approve each deal before it can be listed on the platform.

While residential deals have proven popular in California, data also revealed commercial listings had surprising growth. “We have seen a lot of opportunity for a low-cost, flexible, sub-institutional equity product across the country,” Brian says. “Our value to commercial real estate owners and operators in California should only increase as our platform and capabilities grow, giving investors an even greater selection of investment opportunities.”