To provide commercial real estate investors with insight into how other sponsors are raising capital in 2021, Juniper Square fielded a survey February 2-16, 2021 that covered fundraising goals, strategies, and performance. 142 senior executives at U.S.-based commercial real estate firms participated, representing a cross-section of regional and nationwide sponsors with a mix of property types.
Respondents believe capital will be more abundant this year, and nearly all plan to fundraise. While existing investors contributed the most capital in last year’s fundraising, sponsors are looking to new investors for growth in 2021 – and plan on referrals from existing investors to reach them.
Sponsors believe capital will be more abundant in 2021
A majority of participants believe that capital will be more abundant this year than last.
Our last survey showed the vast majority of sponsors plan to raise more this year than last. This survey confirmed and added more detail to that: 94% of respondents indicated they plan to raise capital this year.
Sponsors aim to raise majority of capital from new investors
Last year, most capital was raised from existing investors. This year, 81% of sponsors are looking primarily to new investors to grow.
Referrals will be the top strategy to find new investors, used by more than 80% of respondents. That’s not surprising, as finding new investors was ranked the most time consuming part of the fundraising process.
Fundraising technology users continue to outperform
Most of the sponsors participating in the study are using fundraising technology, with CRM systems being the most common. Those using technology reported average capital commitments that were twice as large as those not using technology.
For many, offering data rooms saved time in the fundraising process: sponsors not using these were 76% more likely to rate investor presentations as the most time consuming part of fundraising.
Related: See how GMC Properties uses data rooms to fundraise more efficiently.
Juniper Square customers raise capital faster
While technology users reported better results overall, results varied.
Approximately half of survey respondents use Juniper Square’s platform. Those that do report closing capital 40% faster than sponsors using technology from other providers: 22 weeks versus 36 weeks on average from first call to close.
Providing a superior investor experience makes existing investors more likely re-invest. 73% of sponsors using Juniper Square reported raising the most capital last fundraise from existing investors, compared with 52% of typical sponsors. When asked about their next deal, typical sponsors said they expect 51% of investors in their last deal to invest in their next one, but that expected re-investment rate increased to 65% for sponsors using Juniper Square.
Juniper Square customers are also most commonly targeting larger average capital commitments this year: $300-500k as compared to $150-300k for the others.
To get benchmarking data on fundraising goals, strategies, and performance, download the 2021 Capital Raising Survey results summary now.
To learn more about how Juniper Square customers are raising capital faster, click here to watch a quick video demo.