New U.S. securities laws intended to help startup companies raise money are poised to benefit real estate investors as well, allowing individuals to buy stakes in offices and other commercial buildings once off limits to them.
The Jumpstart Our Business Startups Act will ease restrictions on investments in closely held companies, including those set up to own commercial property, by people making less than $200,000 a year and with a net worth of less than $1 million. Before the law’s passage, such firms could market and sell shares to individuals who exceed those levels, known as accredited investors.
The JOBS Act probably will lead to more property-investing programs like those being pioneered by Fundrise LLC, a startup that recently raised $325,000 from 175 people, giving them a 28 percent stake in a two-story building that the firm bought in its home city of Washington. Because Fundrise began soliciting investors before the law’s change, the company had to get permission from the U.S. Securities and Exchange Commission.
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