Seniors Housing Weekly Update - Crowdfunding For Senior Care Development
May 20, 2014
May 20, 2014. 60 Seconds with Steve Monroe. A developer has reached their goal of $1.5 million of equity raised by crowdfunding, something that more people may try in the coming months.
Crowdfunding For Senior Care Development
In our May issue of The SeniorCare Investor, we wrote about MainStreet’s experiment with crowdfunding as a means to raise a portion of the equity capital for a new senior care development in Indiana. At the time, and they were just a week or so into it, they had raised a mere $25,000 towards a goal of $1.5 million. Just one month later, they reached that goal and are set to open it up for another $300,000. The sponsor’s capital was supposed to be a little over $1.8 million, with $10.0 million of bank financing, so we don’t know whether the debt will be reduced, or the sponsor’s capital, if they raise the extra $300,000. It doesn’t matter much, and the point is that the success of the non-traded REITs in raising billions of equity in small $10,000 or $25,000 pieces has clearly demonstrated not only demand for higher-yielding investments, but a belief in the relative safety of seniors housing as an investment class. Obviously, there is always risk in every investment, especially with development, but this may be a trend picked up by other developers and providers.