Real Estate News Exchange | Paul Brent | Jan 7, 2016

Crowdfunding startup NexusCrowd Inc. is celebrating its second successful money raise, gathering $500,000 over five weeks for a GTA industrial redevelopment.

The raise was part of a $5.8-million equity raise for Toronto-based Downing Street Realty Partners, which has two industrial properties in Toronto and one in Mississauga that require redevelopment and remediation spending.

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The Downing Street industrial properties, which total 110,000 square feet, have already undergone some redevelopment work. The two Toronto properties contain environmental contamination and are currently being remediated with an expected October completion date.

New vehicle

The $500,000 raise, completed in December, marks the second successful crowdfunding venture for NexusCrowd and the first experience Downing Street has had with the funding vehicle.

Marc Canale, a partner at Downing Street, said his company had watched the development of crowdfunding for commercial real estate in the U.S. and was eager for an opportunity to participate in this emerging financing market.

“It is new to Canada, there are 175 firms in the U.S., but I think that there are a few of them popping up in Canada and I think there will be many more.”

Canale, one of four partners at the venerable real estate firm, said the attraction of crowdfunding is what it can represent in the future rather than the $500,000 for its current project.

“What we hope is that five years from now (NexusCrowd) is raising $10 million, $2 million in this deal, $5 million in this deal. Our intention is to grow with them.”

The Downing Street partner noted he worked for a number of years in Asia, where crowdfunding has been long established in a more rudimentary fashion.

“(NexusCrowd) will be a much larger funding source for us down the road and the only way for them to start is to start small.”

Canale added his firm expects to close on “a couple properties in downtown Toronto and southwestern Ontario in March and its new crowdfunding partner “will definitely be into the next deals.”

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