CrowdStreet Investors Swipe Right On PMG’s Society Nashville Deal
Property Markets Group’s Society Living multifamily brand is known for offering highly amenitized properties that are attractive to young professionals. It has developed several of these mixed-use properties in desirable neighborhoods in major growth cities across the country, such as Miami and Atlanta.
When it saw an opportunity to bring the brand to Nashville’s booming Gulch neighborhood, PMG worked with the online syndication platform CrowdStreet to raise funding for a 756K SF multipurpose development that will feature 502 rental units in a new 16-story building.
Working with CrowdStreet for the first time, PMG was able to raise $35M in equity in less than a day on the platform.
“PMG embraces innovation in all facets of our business, so we were excited to explore a relatively new equity source,” said Brian Koles, PMG senior director of corporate development. “Also, CrowdStreet’s general terms are comparable to institutional partners but with less red tape to navigate.”
CrowdStreet Managing Director Ilya Gamer said his company is uniquely qualified to take on a deal like Society Nashville.
“For some institutional investors, $35M would have been too small of a sum, while others may have invested the equity but under the stipulation of some control rights,” Gamer said. “One of the benefits for sponsors of raising equity on CrowdStreet is that our investors are passive, meaning the sponsor gets to keep complete control of their project and business decisions.”
The project and client checked many of the right boxes for a successful online syndication deal, CrowdStreet Managing Director Marc Schaevitz said.
These included the sponsor’s extensive track record in CRE, he said. In addition to the Society Living brand, PMG is known for a $10B-plus portfolio that includes such high-profile properties as the supertall Waldorf Astoria Hotel & Residences Miami.
Schaevitz said PMG’s Society Living brand is a model that has been well-accepted in other markets and is a likely fit for the Nashville market, which recently ranked No. 1 for overall real estate prospects on the Urban Land Institute and PwC’s 2023 Emerging Trends in Real Estate report. The study categorized Nashville as a “supernova” among fast-growing cities because of its “tremendous and sustained population and job growth.”
Schaevitz said PMG and CrowdStreet were both eager to apply the online syndication model to this Nashville development.
“The CrowdStreet platform introduced the sponsor to an entirely new capital channel, one which generally involves more passive investing than traditional equity partners,” Schaevitz said. “It’s a pool of capital that may be available even when institutional capital retracts during uncertain times.”
CrowdStreet has worked with more than 330 sponsors and raised $3.8B in more than 700 projects since its inception a decade ago. Gamer said that CRE project sponsors may be becoming more comfortable with this method of funding.
“A lot of times, sponsors will see a peer’s project funded through CrowdStreet and recognize this funding vehicle as an opportunity for themselves,” he added.
Schaevitz said sponsors new to the platform are likely to discover that online syndication is very similar to offline syndication, where accredited investors deploy capital into private CRE deals. Far from being random deals that are posted online with no oversight, the sponsors and their deals are thoroughly vetted and evaluated against market conditions by CrowdStreet, he said.
“With online syndication, investors meet sponsors in a different way, and the whole process is more efficient, high-tech and scaled,” Schaevitz said. “Think of it as a married couple who met online as opposed to meeting in-person.”
PMG broke ground on the Nashville property in the summer with construction completion expected in approximately 24 months.
In addition to offering both market-rate residential units and fully furnished co-living spaces, Society Nashville will feature approximately 8.2K SF of ground-floor retail space. The building’s amenity floor will boast a 20K SF outdoor pool deck and 23.5K SF of additional space for fitness and coworking facilities.
In keeping with Schaevitz’s online dating analogy, it looks like PMG is happy it swiped right on this deal with CrowdStreet.
“All of the investments were collected swiftly through their streamlined process,” Koles said. “We would absolutely work with CrowdStreet again.”
This article as produced in collaboration between CrowdStreet and Studio B. Bisnow news staff was not involved in the production of this content.
Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to firstname.lastname@example.org.
CrowdStreet Inc. (“CrowdStreet”) offers investment opportunities and financial services on its website. Broker dealer services provided in connection with an investment are offered through CrowdStreet Capital LLC (“CrowdStreet Capital”), a broker dealer registered with FINRA and a member of SIPC. Advisory services are offered through CrowdStreet Advisors LLC (“CrowdStreet Advisors”), a wholly owned subsidiary of CrowdStreet and a federally registered investment adviser. CrowdStreet Advisors provides investment advisory services exclusively to privately managed accounts and private funds and does not otherwise provide investment advisory services to the CrowdStreet Marketplace or its users.
Investing in commercial real estate entails substantive risk. You should not invest unless you can sustain the risk of loss of capital, including the risk of total loss of capital. All investors should consider their individual factors in consultation with a professional adviser of their choosing when deciding if an investment is appropriate. Direct and indirect purchase of real property involves significant risks, including without limitation market risks, risks related to the sale of land and risks specific to a given property, which could include the potential for property value loss, potential for foreclosure, changes in tax status and fees, and costs and expenses associated with management of such properties. All investors should consider risks specific to that given property prior to investing.
This article was written with input from an employee of CrowdStreet Inc. (“CrowdStreet”) and has been prepared solely for informational purposes. Nothing herein should be construed as an offer, recommendation, or solicitation to buy or sell any security or investment product issued by CrowdStreet or otherwise. This article is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance. All investors should consider such factors in consultation with a professional adviser of their choosing when deciding if an investment is appropriate. CrowdStreet’s review process of an issuer, deal, investment type or strategy, market, or other investment criteria should not be construed as a recommendation or a solicitation to buy. All investors should consider their individual factors in consultation with a professional adviser when deciding if an investment is appropriate.