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A crowdfunding platform called School of Whales launched June 25, aiming to let people with limited funds begin investing in commercial real estate, but it was no easy task for the platform's principals.
The founders who made School of Whales a reality, allowing people to invest in CRE with as little as $500, worked for two years to build out the platform and comply with financial regulations, and two of them took time to discuss the process with Bisnow.
School of Whales Chief Operating Officer Daniel Pena-Giraldi is also the principal of construction firm Stambul USA and developer of the Langford Hotel in Downtown Miami, and CEO Andrea Petersen is also chief financial officer of Cooper Precision Cos., a 350-person multinational company with interests in oil and gas, renewable energy, real estate and hospitality.
"Our fund had to undergo approval by the SEC and is subject to federal and state financial regulations," Petersen told Bisnow. "Even though raising money for investments through crowdfunding was made legal by the JOBS Act of 2012, there are still a lot of regulatory checks that had to be done to ensure compliance and investor protection."
Petersen said that during the project's beta launch, they raised more than $100K in the first 24 hours, based on word of mouth. They are raising a $50M funding round.
"There are currently two local investment opportunities in the pipeline, so the first $1M that we raise will be quickly deployed," Petersen said.
She said School of Whales is raising a blind fund, "which allows us to diversify investments received into several projects so that our investors can benefit from having a stake in different projects with different risk profiles and investment maturities." Projects will ideally generate cash flows at different stages and from different sources to provide stability while also maximizing returns, she said.
The founders said they want to focus on projects that positively impact their communities. Pena-Giraldi pointed to the example of the Langford Hotel in Miami's business district. It was a historic building that had been abandoned and was in such bad shape that not even a structural engineer was willing to walk into it to assess the conditions, he said. He redeveloped it into a boutique hotel with a lively rooftop bar, which spurred more restaurants and businesses on the block.
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