We love the idea of crowd-sourcing to find out restaurants and shops the public wants in their community, but what about crowd-funding? Crowd-funding is when the public actually uses their own money to develop a project. Is this something that you could see happening in Gainesville?
Stephanie Shriver-Engdahl, CMD, is not content merely to help her company gather Facebook and Twitter fans for its properties. Part of her job as vice president of digital strategy for Forest City Enterprises is to stay ahead of the curve by contemplating how social media may change over time, she says. Exponential growth of two trends in particular — crowd-sourcing and crowd-funding — would be a game changer for retail real estate, she says. Forest City is already experimenting with crowd-sourcing on the Popularise website, which allows developers to solicit ideas from the public. On the Popularise page for Forest City’s Short Pump Town Center, shoppers have submitted some 230 ideas for the sorts of retailers and amenities they would like to see at that Richmond, Va., mall.
But crowd-funding, whereby the public actually invests in the project by snapping up shares online, could take community involvement to another level entirely, Shriver-Engdahl says. “We talk about the idea of instilling this feeling of ownership in people,” she said. “To me there is no better way to instill ownership in people than to literally let them own a piece of the project.”
Crowd-funding is already a reality: About 3,100 Colombians reportedly invested some $239 million to build a 66-story skyscraper in Bogotá, and the Fundrise website is now working with 13 developers to crowd-fund various commercial real estate projects. According to Ben Miller, a co-founder of both Popularise and Fundrise, Forest City is working with Fundrise to crowd-fund equity investment in a portion of one of the biggest projects in Washington, D.C. — a yet-to-be-announced public-private partnership that will cover some 50 acres. Given that projects like this are so massively expensive, ordinary folk might never crowd-fund more than a small portion of the total cost. But even this could amount to a transformative change, as local investors gain more of a direct say and a personal interest in the real estate around them, Miller says. “I call it social capital,” he said. “It is capital that comes from people, and it is social in terms of being interconnected. If you have 1,000 people invested in a project, do you realize how much free marketing you get? You get an unbelievable ripple effect.”
If the trend takes off, local shoppers might end up voting with their investment dollars to influence malls in many ways, Shriver-Engdahl says. “The big banks don’t live in the community and only fund the things they understand, which is how we end up with so much homogenous retail product,” she said. “But wouldn’t it be a cool thing if there was an alternate source of funding, not necessarily because landlords aren’t able to raise capital in traditional ways, but just so that people who live around our shopping centers could literally own a piece of them?”
From the August 2013 issue of Shopping Centers Today