Commercial real estate has seen a remarkable run-up in values in recent years, driven by steady job growth and robust fundamentals. The strong performance coincides with the economic recovery in the U.S., but even so, the outsized increases are well more than would normally be expected given moderate GDP growth in the 2% range during that time. Overall, property values in the U.S. are up 17.7% from the last peak in December 2007 and 66.1% above the trough in January 2010, according to the Moody’s/Real Capital Analytics Commercial Property Price Index (CPPI). Major markets and apartments are doing even better. RCA’s core six markets (New York, Boston, Washington DC, Los Angeles, Chicago and San Francisco) are 39.2% above the last peak and 126% above the last trough, according to the CPPI. Meanwhile, apartments are 60.7% above the 2007 peak and 111.3% above the 2010 trough. So what is driving the rate of increase? Simply put, there is a lot more capital looking to buy commercial properties than owners that want to sell. Commercial real estate is increasingly popular with a wide range of institutional investors, for a number of reasons. As noted, the sector has performed extremely well, which always drives capital, but it is more than that. Commercial real estate produces a regular dividend that is very attractive. The average yield for core real estate is roughly 5.5% and for public REITs it is about 4%. Compared to other fixed-income products (say sovereign debt) that is extremely attractive, not to mention that the debt is secured by properties. Another attraction for foreign investors is to hold assets in American dollars. Whether Americans are satisfied with the level of growth in the economy, compared to other parts of the world the U.S. is seen...

The Securities and Exchange Commission has proposed rules that would permit small companies to seek funding from the general public. Crowdfunding has grown in popularity among artists and inventors. Companies that create home security gadgets, tiny appliances for micro-apartments and sustainable furniture have all received public funding via platforms like Kickstarter. If the proposed rules pass, fledgling housing industry companies can get their businesses off of the ground with the help of the upper middle class. Under the new rules, companies could raise as much as $1 million each year from the public. Shares can be sold in face-to-face transactions and through online funding portals, similar to Indiegogo and Wefunder but with more stringent regulations. Such opportunities could help small companies gain quick access to capital, increasing the success rate of startups. For Startups The new source of funding couldn’t come at a better time. As the nation recovers from the recession, many are regaining the confidence needed to step out and fulfill their entrepreneurial goals. They can’t afford to vie for the generosity of a few accredited investors, entities whose net income exceeds $1 million. Startups are looking for more easily accessible investors and they are in luck. Many Americans, eager to shrug off recession woes, are seeking new ways to make their money grow. The time is ripe to unite these entrepreneurs and new investors. The proposed changes are not an entirely new idea. The JOBS Act outlined regulatory guidelines that paved the way for crowdfunding. The act also forged the trail for funding portals, third-party internet-based platforms for offering and selling shares. These portals will not be registered as brokers, nor can they offer insights or suggestions on investing.  They operate without SEC approval. This is great news for businesses hoping...