Regulation D (Reg D) is a set of rules issued by the U.S. Securities and Exchange Commission (SEC) that lets companies—including real estate developers and syndicators—raise capital through private securities offerings without full SEC registration. This exemption streamlines fundraising while still protecting investors via specific disclosure and eligibility requirements.
Allows unlimited capital from accredited investors and up to 35 sophisticated non-accredited investors. General solicitation or advertising is prohibited, so issuers must rely on pre-existing relationships to bring in new investors.
Permits raising unlimited capital exclusively from accredited investors and allows general solicitation and advertising, making it easier to reach a broader pool of accredited backers.
In real estate, Reg D is widely used for private placements to finance property acquisitions, development projects and syndications. By leveraging these exemptions, issuers avoid the time and expense of full SEC registration.
Developers pool funds from multiple investors through a private securities offering under Reg D. For example, an investor contributing 50% of the capital might receive 50% of the profits, with ownership interests and distributions structured under Rule 506(b) or 506(c).
Platforms like Fundrise used Rule 506(c) to raise over $100 million from accredited investors. This capital underwrote expansion into commercial and multi-family residential assets, demonstrating how crowdfunding and Reg D can scale real estate investment opportunities.
Developers and sponsors use Reg D to secure capital for ground-up projects or renovations. They may leverage Rule 506(b) to tap existing networks or Rule 506(c) to advertise to accredited investors nationwide—all without registering each offering with the SEC.
Reg D provides a critical framework that balances efficient capital raising with investor protections. Developers gain flexible funding sources, while investors—particularly accredited ones—access private opportunities in syndications, crowdfunding and bespoke property deals that fuel growth across the real estate sector.
