By Riley Kaminer
This week, Miami-based nxtCRE announced that it has secured Series A funding led by principals of RiverLake Partners, a private equity firm.
nxtCRE’s platform enables users to find relevant commercial real estate investment opportunities. The startup’s offering is particularly useful for users they call “Must-Buy Investors” (MBIs). These are investors who are taking advantage of a 1031 exchange: a swap of one real estate investment property for another that allows capital gains taxes to be deferred.
The catch? Primarily the quick time frame. 1031 candidates must find a property within 45 days of their sale. They then have 180 days to complete the exchange. Additionally, the properties exchanged must be considered like-kind by the IRS. nxtCRE reports that every year, there are upwards of 70,000 MBIs that collectively acquire $400 billion in commercial real estate using over $150 billion in equity and $25 billion in debt.
Providing property sellers, property brokers, and those seeking equity early access to MBIs improves liquidity, creates greater efficiencies, and reduces marketing time and costs for brokers. Of course, it’s helpful for MBIs as well because it can help them get connected to the property they’re looking for right when they need it.
Lenders verify the type of property, desired location, amount of available equity, price range, and number of days to their borrowers ‘must-reinvest’ selection deadlines. MBIs come pre-qualified, saving time and headaches down the road.
nxtCRE’s founding team, led by Adam Sharif (pictured above) and Ken Griggs, has over 150 years of experience in commercial real estate finance, the company said. nxtCRE did not disclose the amount of the funding, but it raised $500,000 in November from the same investors, according to venture data tracker Pitchbook.
In a statement, founder and chief strategist Sharif asserted that the company’s ability to raise these funds in a challenging macroeconomic climate is a testament to its strong offering.
“Funding for any startup in this environment says much about the company’s business model and its management team’s ability to execute,” commented Sharif. “We’re very excited and appreciative of the confidence the principals of RiverLake Partners have in us and look forward to a fantastic partnership with them.”
Miami is increasingly becoming a hub for proptech innovations. Coming next week to Refresh Miami: Our deep dive into the movers and shakers fuelling the growth of our proptech sector.
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