RegA+ for Real Estate

Since the JOBS Act was first passed in 2012, it has vastly changed the way private companies can raise money. One particular industry making use of the Regulation A+ exemption is real estate. In the pre-JOBS Act economy, real estate investment deals were often limited to private equity or family offices that could afford large price tags associated with commercial real estate deals. However, the JOBS Act has done something incredible for the everyday investor; created opportunities for real estate investments that did not previously exist.

 

Traditionally, real estate investments have been capital-intensive, so managing smaller deals were too challenging to make effective. This limited who could participate. 

 

Since updates to offering limits that went live in early 2021, issuers can now raise up to $75 million for Reg+ offerings, making the exemption even more attractive to issuers in real estate. Additionally, the availability of online platforms for these offerings also contributes to their success. 

 

Through RegA+, offerings usually come in the form of a real estate investment trust or REIT to be more efficient, rather than an offering for a single property, due to the length of the SEC approval process. While investors have been able to invest in REITs for a while now, commissions and fees were usually too high and lowered returns. RegA+ for real estate has been able to introduce efficiencies that lower fees, thus, increasing returns that investors may see. 

 

In a report published by the SEC in March 2020, insurance, finance, and real estate accounted for 53% of qualified RegA+ offerings and 79% of the funds raised through the exemption. This indicates that real estate investments are incredibly attractive to investors and seeing significant success through RegA+ offerings. With the recent increase to RegA+ limits, we will only continue to see more real estate investment opportunities through the exemption.