Real Estate Private Placement Offerings Under New Regulation A+ and Regulation D, Rule 506

Leveraging New Capital Raising Opportunities for Real Estate Fund Sponsors and Developers

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Wednesday, July 1, 2015

Recorded event now available

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Course Materials

This CLE course will provide real estate finance counsel with a review of the SEC’s newly released Regulation A+ rules for crowdfunding and the opportunities and pitfalls for real estate sponsors and developers. The panel will also discuss the impact of Regulation D, Rule 506 solicitation on real estate investments, the process of verifying accredited investor status, and complying with the “bad actor” investor protections.

Description

Under newly released Regulation A+, offerors are now able to raise up to $50 million in a 12-month period, up from the previously allotted $5 million. The real estate market is particularly poised to take advantage of the new crowdfunding opportunities for project development funding and acquisitions.

There are some unique issues for real estate offerings that counsel must consider in structuring the offering. Asset-backed securities are not eligible securities, although there is an exception that sponsors may utilize. It is not entirely clear whether Regulation A+ permits an offering of mezzanine debt. An alternative structure for sponsors to consider is a Regulation A+ offering with preferred equity in an LLC.

The SEC’s significant changes to the private placement provisions in Regulation D have transformed the real estate investment fund market allowing sponsors to advertise private securities offerings to accredited investors via the Internet and mainstream media. Counsel must understand the “bad actor” provisions as well as the broker-dealer implications.

Listen as our experienced panel discusses the SEC’s new Regulation A+ rules for crowdfunding and the opportunities and pitfalls for real estate sponsors and developers. The panel will also discuss developments in Regulation D solicitations, the “bad actor” provisions under Rule 506 and the impact of the general solicitation rules on the real estate investment fund market.

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Outline

  1. Regulation A+
    1. Tier I offerings of up to $20 million
    2. Tier III offerings of up to $50 million
    3. Disclosure requirements
    4. Ineligible issuers
    5. Eligible securities
    6. Investment limitations
  2. Regulation D, Rule 506
    1. Advertising private placements
    2. Verifying that investors are accredited
    3. “Bad actor” provisions
    4. Events that will disqualify an issuer from using Rule 506
    5. Broker-dealer implications

Benefits

The panel will review these and other key questions:

  • What opportunities do Regulation A+ crowdfunding rules provide real estate developers seeking to raise equity, mezzanine financing and debt for commercial projects?
  • What real estate offerings are not permitted under Regulation A+?
  • How does the issuer verify that investors are accredited in a Regulation D, Rule 506?
  • What events will disqualify an issuer from using Rule 506?

Faculty

Kenneth A. Kecskes
Kenneth A. Kecskes
Partner
Fox Rothschild

Mr. Kecskes’ practice focuses on real estate, land development and equity investment transactions. He counsels...  |  Read More

Thompson, David I.
David I. Thompson
Member
Dickinson Wright

Mr. Thompson's practice encompasses corporate, transactional, and business matters, with particular emphasis on...  |  Read More

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