PeerStreet is honored to be named a “Top Real Estate Platform” Finalist by the team at Lendit. This is a big honor for us, especially since we won in our category for Top Emerging Real Estate Platform in 2017.
What’s more, the Lendit community and conferences hold a special place in our hearts. We have been to many of their shows over the years, usually with a tradeshow booth, several members of our team and a speaking slot or two at the panel sessions. They are great events for connecting with our peers in the community, whether directly in our space or in the industry as a whole.
That’s why this year we’re excited to still be attending Lendit virtually. Join us there from September 29th through October 2nd.
Our co-founder and COO, Brett Crosby, will be speaking on a panel about the “Transformation of Real Estate Tech and Lending” on October 1st from 11:25-12:05pm PT. Among other things, the panel will cover why direct real estate investing continues to attract capital. Make sure to catch him on the screen!
If you’d like to attend, you can get a 15% discount with code “SPEAKERVIP”. Hope to see you there!
At PeerStreet, we take our culture seriously. Passionate people help make the magic happen. That’s why we couldn’t be more honored to be recognized as a Timmy Awards Best Tech Work Culture finalist! Now we’d love your help in bringing home the trophy by voting for PeerStreet. Each person can vote up to once per day, so think of us when you’re having your morning coffee or afternoon tea!
Fresh off being selected as part of CB Insights FinTech 250 and having our CEO nominated as an EY Entrepreneur of the Year, PeerStreet was also recently named among Forbes’ Best Startup Employers for 2020, one of the Best Places to Work in Los Angeles in 2019 by Comparably, an American Banker’s Best Fintechs to Work For in 2020 and a Top 25 Fastest-Growing Tech Company in Deloitte’s Fast 500. We appreciate the accolades!
We are very honored to announce that our co-founder and CEO, Brew Johnson, has been selected as a finalist for Ernst and Young's Entrepreneur of the Year Award.
Brew is the entrepreneurial leader whose vision brought PeerStreet to life. He’s also been recognized as one of the best CEOs for women and diversity. Since starting the business in 2014, he has dedicated most of his waking hours to ensuring it grows, innovates and adapts. His background in real estate, law, technology and finance have become the cornerstones of the business. The idea behind PeerStreet has always been to improve the lives of participants (including investors, lenders and borrowers), but also neighborhoods and communities throughout the country.
From EY, the Entrepreneur Of The Year program celebrates the unstoppable entrepreneurs whose unbounded ambitions deliver innovation, growth and prosperity that transform our world. That is exactly what Brew has done and will continue to do with PeerStreet.
“Building PeerStreet has been a dream of mine for a long time,” said Brew Johnson, “it is literally the culmination of years of research, career experiences and thinking. We’ve created a lot, but there is so much more left to do and I couldn’t be more excited about where we’re heading. This is my life’s passion.”
PeerStreet was also recently named among Forbes’ Best Startup Employers for 2020, one of the Best Places to Work in Los Angeles in 2019 by Comparably, an American Banker’s Best Fintechs to Work For in 2020 and a Top 25 Fastest-Growing Tech Company in Deloitte’s Fast 500.
PeerStreet has been selected as one of CB Insights’ prestigious Fintech 250, a select group of emerging private companies working on groundbreaking financial technology. In fact, PeerStreet has been included on the list since it was created in 2017. With the rapid surge of innovative companies in fintech, we are incredibly honored and humbled to be included alongside the most promising companies in fintech.
The CB Insights research team selected the Fintech 250 companies based on several factors, including data submitted by each company and their Mosaic Score. The Mosaic Score, based on CB Insights’ algorithm, measures the overall health and growth potential of private companies. Through this evidence-based, statistically driven approach, the Mosaic Score can help predict a company’s momentum, market health and financial viability.
PeerStreet has achieved many awards for culture, innovation, growth, technology and more. Being consistently included for the third time in a row on this list is an enduring testament to our team’s continued dedication to innovating and fundamentally changing our industry.
PeerStreet was also recently named among Forbes’ Best Startup Employers for 2020, one of the Best Places to Work in Los Angeles in 2019 by Comparably, an American Banker’s Best Fintechs to Work For in 2020 and a Top 25 Fastest-Growing Tech Company in Deloitte’s Fast 500.
PeerStreet has always believed the more transparent, educational, and honest we are as a company, the better off all stakeholders in our marketplace will be. To that effect, PeerStreet continually strives to provide investors with more historical and current data of its loan performance.
Now more than ever, it is important to analyze trends and metrics to understand how macroeconomic factors can affect your portfolio’s health. By surfacing granular data, our hope is investors can make more confident, data-driven investment decisions. Continued transparency is a mantra we are taking forward.
This report outlines the loan performance PeerStreet has seen historically and how that performance has been impacted by COVID-19. It is worth noting that, due to the pandemic, certain qualifying borrowers were granted mortgage payment deferrals. Deferred loans are categorized as paid current in the data sets below.
L-30, L-60, L-90, L-120: Late 30, Late 60, Late 90, Late 120+ this means that a loan has not paid a payment in 30+ days.
Delinquent: PeerStreet classifies a loan as ‘delinquent’ when it is 60 or more days late (Late 60+).
Foreclosure: The action of enforcing the lender’s rights under the loan documents, and potentially taking possession of the underlying property, when the borrower fails to keep up their payments. Once the foreclosure process starts, the most common outcomes are either: (i) the loan is reinstated or pays off before the property is foreclosed on or (ii) PeerStreet takes ownership of the property at auction resulting in an "REO". Properties taken over as REO are typically then marketed to be sold.
Default: A loan is labelled as being in “Default” when PeerStreet commences the foreclosure process. Foreclosure timelines vary from state to state.
REO: “Real Estate Owned,” we have taken ownership of the property, usually as a result of the foreclosure process, but we have not yet sold it.
REO Sale: Sold the property.
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Building on our success in transforming access to real estate debt, we’re launching a Credit Opportunity Fund to match investor demand with current market opportunities.
This new fund strategy, which was covered by Crowdfunding Insider, expands the ways investors on our platform can access real estate investments, providing them with more options in diversifying and customizing their real estate debt portfolios. The Peer Street Credit Opportunity, LP (the “Credit Opportunity Fund”) will allow investors to take advantage of changing market conditions and gain exposure to opportunities that weren't previously available on PeerStreet, such as distressed debt, warehouse financing and subordinate investments.
“This was the next logical step in the evolution of our marketplace and provides more options for different investment preferences,” said Brew Johnson, cofounder and CEO of PeerStreet. “Just like investors on Robinhood or TD Ameritrade can choose whether to buy individual stocks, or invest in ETFs and mutual funds, we are providing similar options to our real estate investors.”
We have been pioneers in fractional investing in real estate loans through our marketplace, making the process of buying into real estate loans similar to buying stocks. To date, we have focused on providing the tools and resources our investors need to select, buy, and build their own real estate debt portfolios - though we have frequently received requests for fund options from investors. The launch of this new fund strategy furthers our mission to continuously unlock value for investors, and create strategies that fit our investor needs.
Our investors are already, in essence, creating their own curated funds either manually or through our automated investing features. But this provides an easy way to deploy larger amounts of capital at once into different strategies. This strategy allows us to match investors to shifting opportunities that are made available through our nationwide network of lenders.
To learn more, reach out or read more about the fund here.
Peer Street Credit Opportunity, LP is available only to accredited investors and qualified clients. Nothing in this release constitutes investment advice. Investors should consult with their financial, tax, and legal advisors before making any investment decisions and to determine whether this fund is suitable to their financial position and investment preference.
Any information regarding Peer Street Credit Opportunity, LP is provided for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or any other product or service by PeerStreet or any other third party. Relevant details regarding investment opportunities are contained within the corresponding private placement memoranda for Peer Street Credit Opportunity, LP. Nothing in this release is intended to provide tax, legal, or investment advice and nothing should be construed as a recommendation to buy, sell, or hold any investment or security or to engage in any investment strategy or transaction. PeerStreet does not represent that the securities, products, or services discussed in this article are suitable for any particular investor.
Today PeerStreet was able to inform our nationwide network of private lenders that we will resume buying residential bridge loans again. We believe this is an important step toward reinvigorating the real estate lending markets that recently froze up due to economic volatility and uncertainty created by COVID-19. Infusing capital in these markets is a crucial step in restarting our economy and helping lenders, borrowers, real estate entrepreneurs and their supporting businesses get back to work throughout the country.
In late March, PeerStreet was one of the first in the industry to pause loan buying. This decision was made in response to COVID-19 issues, such as the closure of county recording offices, health hazards to notaries and local appraisers, and a freeze in the credit markets.
We also made this difficult decision to temporarily pause loan buying until we could better protect PeerStreet’s investors and other market participants, and assess new market supply and demand dynamics. Our goal was to take a step back, review the situation, and restart as soon as possible - which is exactly what happened today. We’re very excited to begin purchasing loans again, not just for PeerStreet as a company but for our entire ecosystem.
We’ve spent the past several weeks speaking with lenders, investors, borrowers and our own family of employees, and we will continue to do so to further understand the evolving situation and how PeerStreet can do our part. Our marketplace participants remain our priority, and we’ll be focused on ensuring that our platform continues to facilitate the flow of capital in real estate.
Thank you for your continued support.
Last year, we posted an extensive update on the performance of the PeerStreet marketplace and we believe it’s important to revisit this and update our customers on the health and status of PeerStreet investment opportunities to date.
As of February 29, 2020, a total of 8,818 loans have been funded through the PS marketplace and 4,924 have been paid off. Of the remaining 3,894 loans (which we define as “active” loans), 92.55% were either current or less than 90 days late, 6.78% were 90 or more days late, and 0.67% were real estate-owned (“REO”), meaning we had foreclosed on the property but had not yet sold it.
Avoiding late payments, defaults, foreclosures, and REOs is our objective, but these are to be expected in any mortgage loan portfolio. While the idea of a default or foreclosure can strike fear into the hearts of investors, it also highlights one of the primary distinguishing qualities of real estate debt investments: there’s a physical property that acts as collateral for each loan investment.
Due to the collateral securing the loans, late payments or defaults do not mean that those loans will not be paid back. For instance, of the 4,924 loans that had paid off as of February 29, 2020, 2.90% (or 143) had gone into default—meaning a borrower had stopped making payments and PeerStreet had initiated the legal process to take back the property on behalf of investors, by filing a notice of default or foreclosure complaint. However, of those defaulted loans, 94.40% (or 135 loans) were resolved without any principal loss to investors.
This collateralization is an especially relevant attribute today, where we are observing a growing sense of investor uneasiness. When borrowers are late or even default on their mortgage loans, lenders can move to sell the underlying property in an effort to recoup capital.
We are planning on building platform updates that will enable us to provide more real-time performance metrics automatically, but until then, we want to walk investors through where our marketplace is currently.
Portfolio Performance - Defaulted Loans
Investors commonly ask about the outcome of loans that go into default. While each loan is different and we can’t predict future outcomes or resolutions, paid-off loans provide a glimpse into how past defaulted loans were resolved. The below graph reflects how paid off loans on PeerStreet’s marketplace were resolved as of February 29, 2020:
Active Portfolio Delinquencies Breakdown
Shifting gears away from paid-off loans, the graph below shows the payment status of currently active loans by separating them into three buckets: (i) loans that are either current or less than 90 days late, (ii) loans that are 90 or more days late, and (iii) loans that completed foreclosure and have become REO.
No lending institution or marketplace is immune to external market forces and events, which is why PeerStreet collects data to better understand drivers of market performance and continually monitors our investors’ active loan portfolio. Our in-house Underwriting, Servicing, and Asset Management teams work hard so you don’t have to bother with identifying loans that match investor demand or collecting, processing, and distributing payments.
If/when a loan does go into default, our Asset Management team pursues both legal remedies (namely, foreclosure) and other out-of-court avenues (such as workouts or note sales) in an effort to get investors paid back. This commitment to investor success remains consistent, even as we continue to adjust our loan submission criteria in an effort to keep our marketplace healthy and active.
Even in a healthy housing market, it is the very nature of investing that not every opportunity—on the PeerStreet marketplace or elsewhere—will perform. PeerStreet’s objective is to build a marketplace that makes it easy to diversify your portfolio so that the risk of any one loan or group of loans not performing does not result in outsized risk to your performance.
We believe a well-diversified pool of loan investments found on PeerStreet will provide value to investors in any market cycle. However, it would be foolish to pretend that the world is the same as it was last month or last year. We are simultaneously dealing with a pandemic/health crisis and a potential financial crisis. One of these issues alone would create challenges, but dealing with both at the same time creates an added level of complexity. To make matters worse, it is very difficult to gauge what effect COVID-19 will have on the overall economy over the medium term.
All of these cross-currents are creating extreme volatility and uncertainty across asset classes. While it is impossible to predict what will happen in the market, our commitment to you is that we will continue to work hard to create value, to launch features and offer products that make it easy to diversify your portfolio, and to provide you different options for your capital beyond traditional asset classes, like stocks.
We are grateful for your continued participation and support, and will continue to be transparent in our communications with you.
PeerStreet made Forbes’ inaugural list of America’s Best Startup Employers for 2020, which recognized 500 startup companies across the country. To be selected, PeerStreet was evaluated across three main categories: employer reputation, employee satisfaction, and company growth.
“It is a huge honor to be recognized in Forbes’ first list of this kind. We have incredible talent here at PeerStreet and our goal has always been to provide the best working environment we can for our employees,” said PeerStreet co-founder and COO Brett Crosby. “We expect a lot out of them and our talented team members have allowed us to achieve the success we have today. We look forward to continuing our journey together.”
This award is presented by Forbes and Statista Inc., a world-leading statistics portal and industry ranking provider. Forbes and Statista analyzed more than 7 million data points to identify the top startup employers out of thousands of qualified organizations to select those recognized this year.
We’re excited to continue to be recognized for our company culture and strength as a business, including being named among the Best Places to Work in Los Angeles in 2019 by Comparably and among American Banker’s Best Fintechs to Work For in 2020.
It’s no secret that we take company culture seriously at PeerStreet, but it isn’t every day we get a four-page spread highlighting our efforts to create an inclusive, diverse, productive, and happy culture. Yet that’s exactly what happened in Geraci’s March 2020 issue with its “Inspiring Excellence Through Shared Purpose" article.
Take a look at what we’re doing, and what some of our employees have to say!
PeerStreet is excited to announce that we’ve promoted Ellen Coleman to Chief Financial Officer. Ellen joined the company a year ago as EVP of Finance. As CFO, she’ll oversee a variety of different teams, including finance, accounting, treasury, servicing, and capital markets, and will focus on bringing more automation to various financial systems for PeerStreet and our users.
Ellen brings more than 15 years of experience in corporate treasury within the mortgage industry, and made an immediate and important impact upon joining PeerStreet. Before Ellen started, much of our tech investments were customer-focused, building intuitive and comprehensive platforms and new products. Ellen’s hire helped bring a renewed focus on internal technology innovation, transforming many of PeerStreet’s more manual financial operations processes into automated ones for greater efficiency and accuracy.
This work has included launching APIs for our purchasing and wire processes, saving time for PeerStreet and our clients alike. She spearheaded automating settlement statements to further improve loan purchasing across the board. She also played an instrumental role in securing $60 million in Series C funding and $4.25 billion in capital commitments in the latter half of 2019.
“It’s hard to overstate the impact Ellen has had in a relatively short time here. She quickly became a respected leader throughout the company and we are lucky to have her leading our finance efforts,” said Brew Johnson, co-founder and CEO of PeerStreet. “We’re looking to build upon the momentum she’s already brought to our financial operations, bringing more automation and innovation to every touchpoint of our business.”
Ellen came to PeerStreet with a strong track record in both treasury operations and debt capital raising, demonstrating proven success with building finance and treasury teams, cash management and wire operations, and establishing new processes to support business objectives, particularly for enabling growth. Her experience will continue to be invaluable for PeerStreet as we scale and expand both the overall platform as well as our finance and credit operations.
“It’s been an incredibly rewarding year at PeerStreet, from marquee achievements like our Series C raise to the less sexy, behind-the-scenes improvements to financial systems, modeling, and reporting,” Ellen said. “I continue to be inspired by the teams and individuals I get to work with on a daily basis, and am so excited to see what new heights we can reach together in 2020.”
Prior to joining PeerStreet in 2019, Ellen held positions as Managing Director at Countrywide Financial Corp, Treasurer at Stearns Lending, and Executive Vice President and Treasurer at both Nationstar Mortgage and Homeward Residential, Inc.
PeerStreet’s growth recently earned the company a place within the top 25 in Deloitte’s 2019 Technology Fast 500 Ranking of fastest-growing technology companies. With recent recognition for both its award-winning culture and technological innovation, PeerStreet has continually adapted as it has grown to capitalize on a clear need in the mortgage finance space for easy, transparent real estate debt investing.
We’re proud to have been named among the top 25 fastest-growing technology companies in Deloitte’s Fast 500 list. For the past 25 years, this list has brought attention to North American companies that deliver technological innovation, entrepreneurship, and rapid growth across a variety of industries.
The ranking is based on fiscal-year revenue growth over the previous three years; PeerStreet’s 4,586% growth was enough to land us at #23.
This announcement marks another example of our incredible growth trajectory this year, highlighted by the $60 million in Series C funding we recently raised.
We congratulate the other firms on the list, and want to thank you all for your support. We have even bigger plans for 2020, so stay tuned!
As reported this morning by Forbes, we’re pleased to announce the completion of a $60 million Series C funding round. Colchis Capital led the round with a consortium of institutional investors. Existing investors Andreessen Horowitz, World Innovation Lab, and Thomvest Ventures also participated.
This raise will help us continue to hire top talent and further scale our two-sided marketplace—the first and largest of its kind for investing in real estate debt.
“We’ve been a strategic partner of PeerStreet for years as an investor in the company and in loans on the marketplace. Leading this round was a natural next step for us,” said Ted Conrads, co-founder and president at Colchis Capital. “We’re excited to be a part of their growth as they continue to innovate as the market leader.”
In addition to the $60 million in funding, we also secured $4.25 billion in new capital commitments from institutions to purchase loans through our proprietary platform. These commitments will help bolster our existing suite of short-term bridge loan products and grow our recently launched 30-year buy to rent loan program.
When speaking about the raise, Brew Johnson, our co-founder and CEO, was proud of the success but remained focused on our vision as a company. “2019 has been an incredible year of growth for PeerStreet, and this funding round will accelerate that growth,” he said. “The injection of equity capital into our business via the Series C, combined with strong demand from loan buyers, means we will continue to provide value for lenders, end borrowers, and investors for years to come.”
Each investment opportunity we offer is reviewed both algorithmically by the PeerStreet platform, as well as manually by our experienced in-house real estate and legal teams. We then aggregate those loans for institutional and accredited retail investors, who in turn provide PeerStreet-approved lenders with capital. Those lenders then make loans to end borrowers who buy properties, improve them, then either sell them to homebuyers or rent them out to tenants.
Reflecting on how PeerStreet’s efforts align to today’s market, COO and co-founder Brett Crosby said, “I think our society is at a crossroads—there is a shortage of housing in many areas of the country and nearly 40 percent of existing homes were built before 1970. We can either build more homes and continue to take over green spaces, or we can up-cycle the existing aging and dilapidated housing stock. PeerStreet’s business model ultimately supports real estate entrepreneurs doing the latter, curing the capital constraints that have held them back and allowing them to reinvest in American communities.”
We are pleased to announce that we won first place in CRETech’s 2019 Real Estate Tech Awards (RETAs) for the Information & Intelligence – Crowdfunding category.
For the past six years, CRETech’s RETAS recognizes the year’s most innovative and cutting-edge companies that have played an integral role in advancing tech in the real estate industry. Winners are selected by an elite panel of judges, including the leading venture capitalists, angel investors, corporate investors, and thought leaders in the real estate tech industry.
As our COO, Brett Crosby said, “PeerStreet’s vision is to align the interests of everyone in this ecosystem—from lenders and investors to borrowers and the communities they represent—by providing both easier access to real estate debt and empowering participants to make better decisions. Winning a RETAS is further validation to our entire team that the work we’re doing is transforming this industry for the better.”
This win comes at an exciting time for us, as we recently expanded our product offerings into long-term real estate debt through a new Residential for Rent program and incorporated more loan types into our Automated Investing feature, which now boasts a low $100 minimum for small-balance reinvestments. As of March 2019, we have over $2 billion transacted on the platform and more than $1 billion in assets under management to date.
RETAS is presented by CREtech, the largest event, data and content platform in the commercial real estate tech industry. For more information about the Real Estate Tech Awards, click here. Also, we’re hiring if you’re interested in joining our growing team.
Is it time to update the definition of an accredited investor? We think so. Our goal is to make real estate debt investing available to as many people as possible. Read our CEO’s Forbes article where Brew Johnson offers ideas on why and how to democratize investing.
As Brew notes in the article, “My argument is still this: Wealth does not equal investor sophistication, and wealth should certainly not equal more opportunity. Today’s laws do not appropriately address either issue.”
“By being able to easily access data and information that in previous decades was generally only accessible to the most sophisticated (and wealthy) investors, today’s average investor is excluded from many more products that are made easy to understand and to invest in through technology, with a similar (if not greater) level of safety as opportunities non-accredited individuals can invest in.”We think the topic deserves more conversation and we’re glad to see Crowdfund Insider and others pick up on this thread. Surely, there will be much more debate on this topic and we hope to further fulfill our mission of democratizing real estate debt investments and truly level the playing field between Wall Street and Main Street.
