Nicholas Schorsch this week launched a website that he says will reshape commercial real estate investing, allowing advisors to share crowdfunding deals with consumers directly.
Yet for now, the site seems to offer more hype than payoff -- both for advisors and would-be investors.
RCS Capital, of which Schorsch is executive chairman, is pitching the site --
"This creates a community," Schorsch says, that "we believe over time will be Facebook-like or Google-like."
FALLING SHORT
All the deals offered on the site will be vetted by RCS Capital's research and compliance personnel, Schorsch says.
Yet only six investments appear on the site, and all but one are from American Realty Capital -- Schorsch's nontraded REIT giant, a spokesman says. He says the sixth, listed as "coming soon" from ARC Property Investment, is from an outside firm -- although that firm happens to share the same initials with Schorsch's REIT company.
"The site seems to imply it's a broad real estate crowdfunding site," says advisor consultant (and Financial Planning columnist) Michael Kitces, "but it's hard to know what to make of it when it launches with only RCS' own solutions."
Meanwhile, the site itself seems not quite ready for prime time. The company says the site will have offerings for both retail and accredited investors; according to the RCS spokesman, all the current listings are retail except the coming ARC Property Investment one.
And investor vetting seems modest at best; the site labeled a reporter accredited -- "Congratulations!" an automatic message announced -- based on the (unverified) responses to two questions.
Meanwhile, of the six investments listed, only four are currently open to investors.
An RCS Capital spokesman says there is a seventh investment not yet displayed on the site. As with the ARC Property Investment one, that additional investment will be offered only to "verified accredited" investors who have submitted a W-2 and contacted an RCS Capital advisor directly.
REFERRAL GLITCHES
Schorsch is also pitching the site's referral feature, which he says connects investors seeking broader financial advice to a nearby advisor -- one of the 9,700 advisors associated with RCS Capital's network of independent broker-dealers.
Yet a search on Wednesday using a zip code for Costa Mesa, Calif., produced two suggested advisors: one in Maryland and one in Virginia.
The site has other issues as well. Clicking to view a prospectus for any of the investments prompts a warning in both Safari and Chrome browsers that users could be putting their confidential information at risk. The spokesman says RCS is working to fix this problem.
Schorsch promises other advantages for advisors. A family office that serves multiple wealthy families, for example, might use the site to open a private real estate investment to other accredited investors, he says.
Schorsch also says the site received more than 200,000 page views after he announced the platform's launch during a real estate conference Monday.
And ultimately, Schorsch says he expects deal flow to increase, with new deals posting to the site monthly or bimonthly.
The platform's offerings will include public and private real estate investments offered as mutual funds, interval funds, private fund vehicles and other individual real estate investments, the company said in a statement.
"There are going to be some very unique opportunities out there," Schorsch says.
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