ATLANTA, GA– With the recession coming to an end and
commercial property values climbing, now is an ideal time to invest in
commercial real estate. However, many investors simply do not have the cash to
buy properties by themselves; for these people, group investing offers a great
way to reap the benefits of the recovering real estate market.
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| Gene Trowbridge |
Furthermore,
those who raise money for commercial real estate purchases through the private
placement of securities may soon find that task a little easier, thanks to a
new federal law that permits such investments to be advertised to the public
under certain circumstances.
Those were some of the points made on the most recent
episode of the “Commercial Real Estate Show” radio program, hosted by Michael
Bull of Bull Realty. Bull and his guest, author and attorney Gene
Trowbridge of The Trowbridge Curriculum, discussed a range of topics,
including the advantages of group investing, securities, private placement
offerings and the impending change in Regulation D.
 |
| Michael Bull |
The federal Securities and Exchange Commission’s (SEC)
Regulation D exempts securities from having to register with the SEC, a process
that can cost hundreds of thousands of dollars, if their investors are deemed
to be “accredited” — meaning they each have a net worth of $1 million (not
including their homes) or earn more than $200,000 year.
Regulation D has, until recently, banned the public
advertising of the investments. However, under a provision in the Jumpstart Our
Business Startups (JOBS) Act that is set to take effect in September, those
seeking to raise funds under Rule 506 of Regulation D — which allows sponsors
to raise an unlimited amount of money — will soon able to solicit accredited
investors from the general public by advertising.
The sponsor will bear the
burden for determining that his investors are accredited, Trowbridge said.
The new rule will “have a major positive effect” on group
real estate investing, Trowbridge said. About $1 trillion was raised for
commercial real estate purchases through the private placement of securities in
2012. With the new rule, Trowbridge said the annual amount could rise by up to
15 percent in the coming years. “That’s a lot of money,” he added.
The major advantage to group investing is that investors
without a lot of real estate experience can place their funds in the hands of
someone who has considerable experience, management expertise and proven
skills, Trowbridge said.
Additionally, group investing often makes it easier for
investors to pursue opportunities outside of the market in which they live,
Trowbridge added. For example, Trowbridge said many of the California investors
he works with are interested in several states in the Southeast, including
Texas, Georgia, the Carolinas and Alabama.
For a complete copy of the company’s news release, please
contact:
Stephen Ursery
The Wilbert Group
404.405.2354
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