You no longer have to be Donald Trump to own a piece of luxury real estate in the Big Apple.
Beginning this week — Todd Lippiatt, formerly of Morgan Stanley and Credit Suisse, and managing principal of Aristone Realty Capital — is launching a Web-based alternative assets platform called Propellr, with a real-estate portfolio in Manhattan valued in the tens of millions of dollars.
Through this venture, smaller accredited investors will be able to gain access to investment opportunities in high-end real-estate properties and debt deals that historically have only been available to institutional buyers.
Its inception comes on the heels of the JOBS Act, which lifted the ban on general solicitation and advertising in specific kinds of private placements of securities.
“There just really hasn’t been a public-facing alternative platform like this one,” says Lippiatt. “Ours is a curated platform, not just a bulletin board.”
Propellr works on a bidding system for a few property-investment opportunities. One of the more prominent is the I.M. Pei-designed Centurion condominium at 33 W. 56th St., which drew 15 investors that funded $1.03 million.
For each offering, the investment details are listed, along with the amount needed to be raised and the projected yield.
Accredited investors can bid on the amount they want to invest, including a minimum amount.
If the total of the bids exceeds the amount needed, minimum bids will come into play so as many investors as possible can take advantage of the deal. “We have a tremendous amount of respect for our investors,” says Lippiatt. “We want to provide as much access … as possible.”
According to Lippiatt, most alternative-investment platforms today lack expertise. “Most just have amounts that need to be raised, and the crowd is left to figure out if it’s a good deal or not,” he says.
In contrast, Lippiatt says, “we look at all the data to bring the best deals to market.”
The Propellr investment team focuses on metro centers and situations in which there are restrained availability and applied liquidity.
“Out of hundreds of deals we see, we may do two that we think make sense for us and for our investors,” says Lippiatt.
Most of the deals up to this point have been focused on New York City mezzanine and distressed-debt opportunities following the financial crisis. But the Propellr team will also be pursuing high-yielding opportunities in other markets.
Lippiatt and the management team of Propellr are putting their money where their mouths are by investing cash individually in the first 10 percent of each deal. “This solidifies that we are aligned with our investments from the start,” he says.