Crowdfunding is one exciting example of the broad trend towards disintermediation. A key element of disintermediation is breaking down barriers through information availability. Real estate crowdfunding is no different and will be enhanced through everyone’s continued effort in making transparency a top priority.
On January 16th, 2016, IntelliStay Hospitality Management LLC, launched an investment offering on CrowdStreet.com, a top real estate crowdfunding platform. The offering provided an opportunity for accredited investors to participate in the ownership of a Holiday Inn Express in Boonville, Missouri. IntelliStay acquired this hotel in October 2015 as part of the company’s broader strategy of aggregating limited and select service hotels in secondary and tertiary markets throughout the United States. These assets tend to exhibit lower volatility of cash flow than the higher end of the market and yet IntelliStay is able to acquire them at attractive cash flow yields. IntelliStay believes this represents a pricing inefficiency that presents an attractive investment opportunity.
I was a part of the dawn of the modern era of Real Estate Investment Trust capital formation. During the late 1980’s through the mid 1990’s I was an investment banker in the real estate group of Merrill Lynch - arguably the leading firm for REITs. With some exceptions, the modern era of REITs benefited generally from a level of discipline focused on alignment of interests with shareholders.