Regulation A Tier 2 for CRE Sponsors: Is It Worth It?
By Commertize Desk · Published 5 November 2026
The sponsor's question is simple: can a commercial real estate deal take checks from people who are not accredited investors, with small minimums, without a full IPO? Under Regulation A Tier 2 the answer is yes, up to $75 million in a 12-month period, but only after the SEC staff qualifies the offering and the sponsor accepts ongoing reporting.
What Tier 2 gives a sponsor
The SEC's Regulation A overview describes two tiers. Tier 1 allows up to $20 million; Tier 2 allows up to $75 million, following the amendments adopted in November 2020. Tier 2 offerings preempt state securities registration, which removes a state-by-state review that can add months to a Tier 1 timeline.
The practical value for a sponsor is a wider buyer pool and smaller tickets. Rule 506(b) and 506(c) under Regulation D generally limit sales to accredited investors in practice; Tier 2 can reach the general public, subject to investment limits for non-accredited buyers of the greater of 10% of annual income or net worth.
What it costs
Tier 2 is not a light filing. The issuer files Form 1-A, which includes offering circular disclosure and two years of financial statements audited by an independent auditor. The SEC staff reviews and qualifies it. After that, the issuer files annual reports on Form 1-K, semiannual reports on Form 1-SA and current reports on Form 1-U.
For a single-asset CRE vehicle, that means audited financials on a newly formed entity and a reporting calendar that continues for the life of the securities. The SEC's Regulation A rules at 17 CFR 230.251 to 230.263 set these terms.
Where it fits against Rule 506(c)
The SEC's Regulation D overview shows the alternative: Rule 506(c) has no dollar cap and no SEC qualification, but it limits buyers to verified accredited investors. A sponsor with a $20 million acquisition and an accredited network may find 506(c) faster. A sponsor with a $60 million retail-facing asset, such as a grocery-anchored center with a community following, may find Tier 2's reach worth the audit.
| Question | Tier 2 | Rule 506(c) |
|---|---|---|
| Buyer pool | Public, with limits for non-accredited | Verified accredited only |
| Dollar cap | $75 million per 12 months | None |
| SEC review | Qualification required | Form D notice only |
| Ongoing reporting | 1-K, 1-SA, 1-U | None required by the exemption |
Where tokenized interests change the math
Whichever exemption a sponsor picks, the securities still need recordkeeping, transfer restrictions and a way to hold or trade. A tokenized interest, meaning a digital security recorded on a shared ledger, can carry those rules in the instrument and let small holders see their position and distributions in near real time. That addresses lower minimums and transparency, not the exemption itself: the legal path is chosen first, and the digital record sits on top of it. The sponsor-side steps follow the same sequence either way.
Source: https://www.sec.gov/files/rules/final/2020/33-10884.pdf (published November 2020)
What to do next
If you have a commercial property you are considering bringing to market, start at Commertize's commercial real estate tokenization path.
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Asset class: Real Estate