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Real Estate Crowdfunding and Its Discontents Whitepaper

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WRITTEN BY
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Lightstone DIRECT Team
December 3, 2025
December 1, 2025
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Market Perspective

Overview

Over the past decade, many so-called "crowdfunding" platforms that claimed to democratize real estate investing have instead underdelivered with poor risk controls, lack of transparency, misalignment with sponsors, and fee-heavy structures.

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The opportunity hasn't changed: Private-market real estate still offers a strong thesis as a hedge against volatility and driver of uncorrelated returns, especially given today's public markets and broader economic conditions.

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However, private-market real estate remains underrepresented in most individual investor portfolios. According to a 2023 study from NAREIT, while institutional investors like pension funds allocate between 10-20% to private real estate, individual investors typically allocate under 3%, leaving significant diversification and income potential untapped.

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Our newest whitepaper explores how individual investors can tap into the potential benefits of private real estate. It takes a hard look at the shortcomings of the crowdfunding model and makes the case for a different approach: direct-to-manager.

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Lightstone DIRECT Team
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