Few Real Estate Sponsors Use SEC Rule Allowing Advertising Finds New Study

A working paper examining 1,180 offerings from 679 U.S. real estate sponsors found that few of them use a Securities and Exchange Commission (SEC) rule that allows them to advertise. The study, conducted by Usman Sheikh, a CPA and founder of Web Worx Labs, analyzed SEC Form D filings from July 2025 to June 2026, combined with a hand review of sponsor websites and public ad libraries.

The study revealed that 679 real estate sponsors filed 1,180 offerings seeking a total of $27.9 billion. Of this, $3.3 billion was reported as sold, representing approximately 12 cents for every dollar sought. The median offering was $1.9 million from 13 investors, and 55% of the offerings reported nothing sold. Among the 88 largest sponsors selling to the open market, 27 advertised on LinkedIn, Google, or Meta, while 61 did not.

The paper found that sponsors that advertised reported more investors on raises above $10 million. Specifically, among raises below $10 million, sponsors that advertised reported a median of 46 investors, compared to 53 for those that did not. For raises between $10 million and $30 million, the figures were 81 and 48, respectively. For raises between $30 million and $100 million, the numbers were 137 and 60.

The review of sponsor websites found that only 4 out of 95 offered all five investor intake features the study looked at.

The paper is clear that these are associations, not proof that advertising caused the difference. However, it suggests that for larger raises, advertising may play a significant role in attracting more investors. The findings could be particularly relevant for real estate sponsors considering whether to use the SEC Rule 506(c) to advertise their offerings.

The study provides a detailed analysis of the advertising practices of real estate sponsors and their impact on investor counts. It is available for free on SSRN, allowing readers to access the full findings and insights. The research could be of interest to real estate sponsors, investors, and regulatory bodies looking to understand the dynamics of fundraising in the real estate sector.

In conclusion, the study highlights the potential benefits of advertising for real estate sponsors seeking larger fundraising amounts. While the findings do not definitively prove causation, they suggest that advertising could be a valuable strategy for reaching more investors.