reAlpha launches fractional ownership platform for STRs
US: AI-powered real estate technology and investment company, reAlpha, has launched a fractional ownership platform for short-term rentals.
The first vacation rental available on reAlpha’s new platform is the ‘Jasmine’, a five-bed, 4.5-bath property located in Orlando, Florida, America’s largest travel and tourism destination.
reAlpha’s fractional ownership platform, which can be accessed through the company’s web-based application, will allow accredited and non-accredited investors to add well-located vacation rentals to their investment portfolios through “initial property offerings”. Investors also have the ability to track the performance of their investments through the platform.
The launch of the platform represents an important step in reAlpha’s efforts to democratise the short-term rental economy by empowering individuals to secure passive equity interests in high-quality rentals for a fraction of the total price of the property.
reAlpha CEO Giri Devanur said: “Our goal from day one was to create best-in-class technology that would enable everyone to acquire fractionalised ownership in the growing short-term vacation rental asset class. We took our time to test and continuously refine our model and technical capabilities to ensure we are able to consistently deliver a great user experience and present attractive investments.
“We are excited to finally make our initial property offerings available to the public. This platform opens up new opportunities for domestic and foreign investors alike, providing them with optionality as they seek to diversify their portfolios,” he added.
reAlpha says that it thoroughly vets every fractional investment opportunity using its proprietary AI-driven algorithm, reAlphaBRAIN, to analyse large quantities of data to identify and rank properties that are most likely to deliver a return on investment that is on par or higher than the industry standard.
After AI analysis is complete, reAlpha’s experienced real estate investment professionals conduct their own rigorous evaluation and adjust each property’s score, which trains the machine learning model. Only the properties with the highest scores are ultimately purchased by reAlpha and presented to potential investors.
The ‘Jasmine’ property represents the type of fractionalised investment opportunity that reAlpha plans to continue making available to individuals. The 2,271-square-foot modern townhome is located in a gated community less than 10 miles away from Walt Disney World and Universal Studios, benefiting from strong leisure travel.
The property features a second-floor games room, Disney- and space adventure-inspired bedrooms for children, a heated pool, dedicated workspace and other amenities. Guests can also access the gated community’s different pools and workout and sports facilities.
Orlando is considered to be the theme park capital of the world and a top destination for vacation rentals.
The World Travel & Tourism Council estimates that travel and tourism in Orlando had an economic contribution of over $31 billion in 2022, representing 20 per cent of the city’s total GDP and recovering above 2019 levels by $2.7 billion. Based on AirDNA and its own analysis, reAlpha believes that the Jasmine is capable of generating annual revenue of over $61,000.
reAlpha signed an agreement with Luxembourg-based private alternative investment group GEM Global Yield LLC SCS [GGY] for a $100 million capital commitment in December, one month after securing a $200 million financing facility from investment management firm Churchill Real Estate to fuel its acquisition growth.