Fundrise CEO Ben Miller recently joined the “No Cap by CRE Daily” podcast for an in-depth conversation covering everything from how we’ve built the company from the ground up, to our unique investment philosophy, and where we see the market heading. Below are just a few of the key insights from the discussion.
Strategic insights from the conversation
1. Our investment philosophy: Macro over micro
The thesis that has guided our investment decisions over the years: 80% of real estate returns come from identifying the right macro trends, with only 20% driven by operational execution. As Ben explained on the podcast, "The real estate industry, because they don't have much allocation authority, overemphasizes the importance of individual deals. That deal matters—you have to be compulsive about execution— but the alpha is mostly in being in the right trend."
This framework led us to exit urban infill before COVID, pivot aggressively into build-to-rent during the pandemic, and position the portfolio for what we believe will be a lower-rate, deflationary environment ahead.
2. How we created our build-to-rent platform
In early 2020, at the inflection of Covid, homebuilders were concerned that they faced catastrophe and offered to sell thousands of homes from their pipelines to us. We moved decisively and purchased what seeded our build-to-rent platform from a number of homebuilders. As we all know now, the market then reversed dramatically—but we'd already locked in attractive bases across a number of Sunbelt markets. Today, our scaled BTR platform operates with institutional credit lines from JP Morgan and Goldman Sachs, with our GP structure charging zero carried interest so you benefit from institutional-quality assets at near-cost.
3. Finding value in credit dislocations
We've identified opportunities in securitization markets that traditional institutional investors miss. During the 2022 downturn, institutions crowded into senior tranches, pushing BBB-rated yields to 15% on deals with 7% implicit cap rates. We moved into those risk tranches when the pricing made sense. Today, we're seeing similar inefficiencies in data center financing—a sector where Wall Street lacks underwriting frameworks and therefore can price risk too wide.
4. Technology as a core advantage
Half of our 200-person team consists of engineers. We've built proprietary systems spanning everything from investor onboarding and fund administration to property management and construction oversight. Real estate generates millions of data points at the property level, but the industry typically reduces this to basic spreadsheets. Recent breakthroughs in generative AI, specifically the ability to structure unstructured data, have changed what's possible. Our new RealAI platform, launching this month, applies these capabilities to real estate underwriting and operations in ways that weren't feasible even six months ago. This vertical integration creates advantages that traditional asset managers can't replicate.
5. AI's impact on our business and the broader economy
We're implementing AI across our operations in ways that are already delivering measurable results. Our customer service AI has a roughly 92% resolution rate, handling the majority of our customer support inquiries. Ben shared his view that this type of labor displacement will accelerate across the economy, creating deflationary pressure that will force the Fed to cut rates more than markets currently expect—a tailwind for real estate values.
Our market outlook
Ben outlined his expectations for the next 12-18 months:
- Tariffs will pressure consumer spending
- AI will accelerate job displacement in knowledge work
- Inflation will fall faster than consensus expects
- Real estate will become an increasingly attractive hedge as equity markets face pressure.
Listen to the full conversation
The discussion covers additional topics including our regulatory journey opening private markets to individual investors, our venture capital investments in companies like OpenAI and Anthropic, and Ben's perspective on everything from data centers to the evolving securitization landscape.
