April 7


You made it to Friday.

This week: One of Fifth Wall's partners Alok Sindher was featured on the Factor This! podcast talking about the firm's infrastructure strategy. Plus, what the U.S. government might do for cities that build with climate in mind.

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Fractional investing startups rising in real estate

What's trending

Fractional investment startups are making it a lot less cumbersome to become a real estate investor. You'll be one of many owners for a property—vacation homes, single-family homes, apartments, even industrial properties. And then see your share appreciate and benefit from the rental income generated. There are a lot of startups rising in the space such as Arrived, Lofty AI, reAlpha, and Landa as Wired details here. One example is the startup Fractional which sees this type of investing as a way to remove the logistical challenges of property ownership. Don’t need to waste time searching for a property or come up with a down payment. No need to find tenants or handle property maintenance either.

“What’s been most impressive to me,” a Fractional angel investor told TechCrunch, “…is that in an industry that’s been very asset heavy—you need to buy a house and do construction and then sell it, or buy an asset and then let people invest—they’ve taken a pure software approach that doesn’t compromise the ease of the process and still gives people the hands-on feel of owning a house.”

What's the catch?

First, it has the potential to shake up who becomes an owner in the real estate market. Right now, mom-and-pop landlords own 70 percent of rental properties in the U.S., according to Census data that Wired pulled. That ecosystem could change if it becomes easier and less expensive to buy in. Second, it could be tougher on renters. Fractional investing puts a lot of distance between renters and landlords. It emphasizes the angle that housing is an investment tool and really being used for profit, Katie Goldstein, the director of housing and healthcare campaigns at the Center for Popular Democracy told Wired.

The bottom line

Fractional investing startups still represent a “tiny niche in the real estate market,” that growing a lot quicker now, Wired reported. It’s hard to say what the future holds but lowering the barrier and eliminating the hassle to real estate ownership is exciting for many first-time real estate investors.



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The funding gap for cleantech hardware startups...


“These technologies that are applied to buildings, they’ll require factories and power plants... In the climate infrastructure space, you need a different kind of capital stack to more efficiently capitalize these companies and avoid mistakes made in Clean Tech 1.0.”

—Alok Sindher, partner at Fifth Wall focusing on infrastructure and special situations, featured on Factor This! podcast. For more on how Fifth Wall's climate infrastructure platform is solving for these challenges listen to the episode here.


In Fifth Wall's latest vodcast, Christian Thatcher, Fifth Wall VP, and Cedric Char, Fifth Wall senior associate, unpack the newest report from the IPCC, the scientific body that guides the UN on climate change. Tune in here.

Reassessing priorities

Is the U.S. government paying for cities' bad climate behavior? Last week the New York Times’ podcast The Daily spoke with reporter Jim Tankersley about this and the chapter in the Economic Report of the President that prompted this question.

The short of it is that federal disaster relief dollars bail out cities that keep choosing to build in risky areas. While the government can’t tell cities what or where to build, it can give them a reason not to.

“So what the report suggests is... We’re going to give money to the places that don’t build on flood plains, that don’t build in fire zones, that are more careful about what and where they build,” said Tankersley on The Daily.

The larger challenge? There's enormous pressure on the U.S. government to adapt, but implementing those policies mean making hard choices for current and future administrations. "That's the real tension driving the economics in this report," Tankersley said on The Daily.

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