CrowdStreet founder Tore Steen has stepped down from his CEO position at the real estate investment marketplace, and Jack Chandler has taken over as interim CEO, according to a statement by the firm. Steen had been one of the longest-serving CEOs in the real estate crowdfunding industry.
CrowdStreet was hit with a negative article published by WSJ.com this past week that claimed investor funds had been lost due to a firm raising money on the platform that had several “red flags.” While not attributed to the news, Steen’s departure was announced following the report.
Steen will continue to serve on CrowdStreet’s Board of Directors.
Chandler was formerly a Managing Director, Global Head, and Chairman of Real Estate at well-known asset manager BlackRock. He has served as a strategic advisor to CrowdStreet for several years. Chandler stated:
“My career has been focused in commercial real estate, an alternative asset that has proven over time to be one of the best ways to diversify investment portfolios and build wealth. I’ve advised CrowdStreet’s leaders for more than three years and have seen the value the platform delivers to investors and sponsors. The company’s mission has been and will continue to be to provide investors with the best online real estate investing experience, with tools and resources typically reserved for an institutional audience. Our evolution to a registered FINRA broker-dealer allows us to do that even better.”
At the same time, CrowdStreet announced its “next phase of evolution” that will include new products for investors. New features for the platform include escrow account funding, a new accredited investor verification process, and “operational improvements” which are said to include greater investor protection.
The enhanced operations will involve more rigorous due diligence for issues raising capital on the platform. CrowdStreet was criticized in the WSJ article for not including details of prior performance on its platform for a firm raising capital that eventually went bust.
Dino Vendetti, a member of CrowdStreet’s Board of Directors, said that after earning FINRA’s designation as a broker-dealer in 2022 and after more than a year of implementing new operational standards, “we’re excited that investors will soon experience our new-and-improved offerings as a broker-dealer.”
Rising interest rates and certain regional markets have hampered real estate investors, causing some to pull back and one large platform to shutter. This, along with changing work requirements such as the rise of work from home, have altered real estate markets permanently. At the same time, there remains hope that interest rate increases in the US may be at an end providing some clarity for markets going forward.
