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Crowdfunding has become a hit in real estate circles, providing a new way to raise capital—and a nice way for investors to get a piece of the action with as little as $1k. But who knew it would find its way to CMBS?
Morgan Stanley analyst Richard Hill did some digging, discovering three loans (worth $71M total) made to Colony Hills Capital—underpinning two CMBS deals—secured against a portfolio of five multifamily properties.
And here's the kicker: this portfolio received $12M of crowdfunding on EarlyShares.com (an ad that can still be found here), Morgan Stanley says, which could signal a new trend. It's an "untested ownership structure in CMBS," Richard says.
While it's something to pay attention to, "the question becomes, how many of these are showing up in CMBS and, more importantly, what happens when these things go bad?" Richard says. "I really don't know." [Bloomberg]
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