Democratizing commercial real estate investing : the impact of the JOBS Act and crowdfunding on the commercial real estate market
Name
867639428-MIT.pdf
Description
Full printable version
Size
17.83 MB
Format
Adobe PDF
Checksum (MD5)
9af2ded31c5c0447536a2a7a1b9cd8e4
Author(s)
Burgett, Bonnie L. (Bonnie Leigh)
McDonald, John R
Advisor(s)
Walter Torous.
Alternative Title
Impact of the JOBS Act and crowdfunding on the commercial real estate market
Date Issued
2013
Publisher
Massachusetts Institute of Technology
Abstract
This thesis systematically evaluates how rapid developments in the nascent crowdfunding industry, combined with recent regulatory changes, will impact the commercial real estate markets. The phenomenon of crowdfunding, defined as raising numerous small amounts of capital from a large number of people, or the crowd, has been accelerated by the recent passage of the Jumpstart Our Businesses Start-up Act (JOBS Act). The JOBS Act legalizes and facilitates the sale of securities used to crowdfund equity and debt investments, giving rise to a proliferation of new crowdfund entrants in various business sectors, including the commercial real estate arena. This thesis first gives a detailed analysis of the JOBS Act legislation and how it alters the current regulatory and business landscape. The focus then turns to the commercial real estate markets, tracing the evolution of commercial real estate as an institutional asset class and the influence large, institutional investors such as pension funds and real estate investment trusts exert on this market. The authors also examine the impact on the average investor and conclude that these large institutional investors have bifurcated the market, leaving the average investor unable to gain exposure to "hard" commercial real estate assets. The authors then link the research to crowdfunding, first with a chapter on the emerging and dynamic crowdfund industry in general, and then on specific commercial real estate crowdfunding sites, also discussing sites related to this sector. The authors strengthen this primary research with field investigations, conducting interviews with real estate developers, investors, and securities lawyers specializing in regulatory law. They concurrently surveyed 138 well-vetted real estate professionals (the MIT Center for Real Estate alumni). The thesis then projects the size of the potential dollar value of the commercial real estate crowdfund market based on existing value and turnover in the commercial real estate markets. The final chapter imagines what this market will look like in 2015; concluding that crowdfunding will have a profound effect on the commercial real estate market.
Description
Thesis (S.M. in Real Estate Development)--Massachusetts Institute of Technology, Program in Real Estate Development in Conjunction with the Center for Real Estate, 2013.
This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections.
Cataloged from student-submitted PDF version of thesis.
Includes bibliographical references (pages 145-152).
Subjects
Center for Real Estate. Program in Real Estate Development.
MIT Department
Massachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development.
Massachusetts Institute of Technology. Center for Real Estate
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