"GlobeSt.com also interviewed Paul S. Rutter, of counsel at Gilchrist & Rutter and a board member of the UCLA Ziman Center for Real Estate, about the risks that crowdfunding presents. While Rutter admitted that crowdfunding has facilitated investors’ participation in commercial real estate deals, there are still real risks, as there are in any financial transaction. “For investors making an investment in a loan, the risks are similar to those taken by any lender. The borrower might default; there could be a loss of income from defaulted interest payments and a loss of principal from a failure of the borrower to repay the loan,” said Rutter. He added, “In the context of an equity investment through crowdfunding, the risks are similar to any other syndicated equity deal. The limited partners/members who invest are at risk of dilution through the investment of additional capital, whether to meet cost overruns, to pay deductible losses on insurance claims, to satisfy third-party claims and to pay for ongoing capital expenditures and leasing expenses.”..."
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12/29/2014
GlobeSt: "Crowdfunding: Expanding the Investment Arena"
About UCLA Ziman Center for Real Estate
- UCLA Ziman Center is a multidisciplinary research center of UCLA Anderson School of Management and UCLA School of Law. We seek to advance thought leadership in the field of real estate by generating influential research, educating the next generation of leaders and providing meaningful forums for industry professionals and policy makers.
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