AKA United Nations, an extended-stay hotel-condominium on East 46th Street near Second Avenue, will start taking guests Sept. 10. Sales of the suites have already begun. Of the $95 million it cost to buy and fix up the existing hotel, $12 million was raised from online pledges.

It's "the first ever crowdfunded building in New York coming to completion, from A to Z," said Rodrigo Nino, chief executive officer of Prodigy Network, which is gut-renovating the building with partners. Until now, "everything has been about promises."

Real estate crowdfunding -- in which participants chip in as little as $100, in some cases, for a stake in a property -- has struggled to establish its bonafides in a market where there's no shortage of institutional capital, especially in places as attractive as New York. Most of the 152 U.S. crowdfunding websites listed by trade publication Times Realty News are jockeying to finance modest buildings in smaller cities and towns.

The movement is still young, spurred by the 2012 Jumpstart Our Business Startups Act, which eased rules for sales of some investments. This year, crowdfunding for commercial real estate will more than double to $2.57 billion, the research firm Massolution estimated in March. That's a tiny fraction of nationwide sales volume, which totaled $255.1 billion in the first half, data from Real Capital Analytics Inc. show.

"The attention crowdfunding has received is out of proportion with its market share," said Sam Chandan, president of New York-based Chandan Economics, a provider of real estate data and analysis.

Kickstarter Projects

Amassing small contributions for real estate has far to go before it can upend the industry the way Kickstarter did for creative endeavors from video games to films to music CDs. The "Veronica Mars" movie, a card game called Exploding Kittens and GoldieBlox, a toy set that teaches girls engineering skills, were among those at least partially funded through the site.

For real estate, the process is more complicated. Investors typically must be accredited, documenting their ability to take risks with their money, often by presenting tax returns.