Real estateused to be the province of the wealthy and the super wealthy, but a new firm wants to make it a viable option for the middle class. Newport Beach, Calif.-based Nexregen, a company cofounded by former CB Richard Ellis Inc. CEO Ray Wirta, will offer ownership stakes in commercial properties to people who otherwise wouldn't be able to afford them.
“Our target customer is a person who wants to participate in real estate, but may not have enough money for a down payment on their own home — someone under the age of 40 who has some savings,” says Harold Hofer, Nexregen's CEO.
Nexregen will cut out the middlemen —planners and their broker-dealers whose fees typically comprise 10 percent of the investment sum. Instead, investors will give their money directly to Nexregen, with the minimum investment of $2,500.
Currently, the firm owns one property, Firewheel Village, a 148,870-square-foot retail center in Garland, Texas. Nexregen plans to hold the center for at least three years, after which it will sell the center and distribute the proceeds to shareholders.
“This is kind of a pilot program where we are trying to iron out the kinks,” says Hofer.