The past few years have seen the growth of the online real estate investment industry, with several players getting significant VC and institutional backing. But earlier this month, The Real Deal reported that one of the early pioneers in the space – RealtyShares – would no longer take on new investments and shed most of its staff.
Left in the space are several newer entrants, including the Goldman Sachs-backed Cadre, founded in 2014, and EquityMultiple, founded in 2015 and backed by real estate investors such as Mission Capital and Ken Pasternak.
David Einhorn's Greenlight Capital returned -2.9% in the second quarter of 2021 compared to 8.5% for the S&P 500. According to a copy of the fund's letter, which ValueWalk has reviewed, longs contributed 5.2% in the quarter while short positions detracted 4.6%. Q2 2021 hedge fund letters, conferences and more Macro positions detracted 3.3% from Read More
Amid the uncertainty surrounding the industry, EquityMultiple announced some significant hires this week, including grabbing Brett Klein as its new CFO and doubling its staff. Klein was a senior member of Colony NorthStar, serving there as Managing Director and Head of Alternative Products overseeing NorthStar’s retail capital raise of over $4.5 billion, according to a press release.
Along with Klein, Henry Kwong joined as Senior Director of Asset Management. Kwong comes from private equity firm Clarion Partners, where he helped manage its $3.5 billion institutional multifamily open-end fund.
The firm’s staff growth came over a two-month period that also saw a 15% increase in total investment volume and a partnership with New York-based developer Youngwoo & Associates on a $500 million Qualified Opportunity Zone Fund.
Cadre is also feeling good about the industry’s future, recently announcing two new platforms: Cadre Secondary Market, which is aimed to help investors trade their real estate investments more easily, and Cadre Managed Portfolio, geared to allow investors to build their own real estate portfolios.
Potential concerns about growing too fast too quickly seemed to be reflected in the statements from EquityMultiple CEO Charles Clinton. Giving a nod to the issues surrounding RealtyShares, Clinton said in a prepared statement that, “We remain committed to sustainable, organic growth as demonstrated by our measured approach to new hires and consistent increase in closed transactions. The investors in our company are leaders in the fields of real estate, finance and investing, and are aligned with our disciplined growth plan.”
RealtyShares, on the other hand, had raised $58 million in VC money from several VC funds. Their closure, according to the company’s statements, was due to the inability to raise more funds.