September 14th, 2010 marked the 50th anniversary of Real Estate Investment Trusts in the U.S. For the first time, REITs brought the benefits of commercial real estate to the average investor. Since then, investors have risen to the opportunity and today U.S. REITs constitute a more than $300 billion equity market, with an average daily trading volume of about $4 billion. Globally, REITs and listed property companies constitute a more than $700 billion industry, making listed REITs and the real estate investment universe collectively a more than $1 trillion market.
However, with crowdfunding now on the scene, many are wondering if crowdfunding could actually be the new REIT. Some industry experts think it could be as crowdfunding is a powerful means of accessing social capital for businesses, philanthropy and personal projects, and that can certainly involve real estate. Where REITs gave the average investor the opportunity to invest remotely in real estate as an amorphous asset class, crowdfunding brings the opportunity to invest in local assets and enterprises directly to the people who are most interested in their long term success – stakeholders in the surrounding community.