First Crowdfunded Real Estate Project Paying Off
Being raised in both a real estate family an in the social generation has made Ben Miller a visionary when it comes to the real estate market. Previously commercial real estate was a playground for large scale investors only. Miller is changing that. He took a beaten down building in one of DC’s transitional neighborhoods and turned it into a crowd funded project.
“We didn’t know it would become a movement, and that the movement would be our business,” said Miller. “We raised $350,000 from 175 people at $100 a share, and now the industry will do a billion dollars a year, and we’re doing a project a week and raising probably half a million dollars a day.”
Miller’s company, Fundrise, is an online crowdfunding platform offering individual investors a chance to buy shares in a commercial real estate project. The returns come from both the rental stream and the appreciation of the property itself. What made the DC H Street project so enticing was the neighborhood was on the verge of big growth but it begged for an anchor destination to get the ball rolling.
“The whole idea was to do something different, to do something that the neighborhood wanted, so the space is both a restaurant and high fashion, it has a cafe,” Miller said. “It’s called Maketto meant to be a communal market, and the people invested in this project not only to own a piece of the real estate but also a piece of the restaurants.”
Maketto is a social network of retail and restaurants on three levels, with communal seating everywhere, and open air spaces on the roof. Maketto is very nearly a visual manifestation of the philosophy behind its fundraising; put simply, a social structure grown out of social financing.
“We’ve created an anchor down this side of H Street, so it’s drawing more people here,” said Miller. “It’s probably the coolest project in the whole city, and that’s making it a destination. The real estate growth from this neighborhood has been sensational.”
Miller estimates that the building itself has appreciated between 50 and 100% since the crowed brought it back to life. For the neighborhood, its contribution appears invaluable.