In recent times, the allure of real estate investing has amplified, providing investors a gateway into profitable real estate markets and investments, which were once hard to tap into.
A sector that’s been buzzing with opportunities is commercial real estate. Standing out in this space is Cadre.
This review aims to deep dive into Cadre’s real estate investing platform to gauge its potential fit for your investment landscape.
Essentials about Cadre
Founded in 2014, Cadre prioritizes high-quality offerings specifically for accredited investors. The company’s mission revolves around democratizing access to commercial real estate for those who otherwise might find it challenging to step into this sphere.
Till date, Cadre has orchestrated real estate transactions amassing close to $4.7B.
Despite a plethora of players in this niche, many platforms possess a more expansive list of properties. Contrarily, Cadre’s judicious selection seeks to deliver superior returns by channeling funds into real estate within burgeoning markets.
Cadre adopts a comprehensive approach involving manual scrutiny, data analytics, and tech prowess to cherry-pick promising investments. Their portfolio spans offices, industrial realms, hotels, and multifamily residences. What sets Cadre apart is its skin in the game; they co-invest, reinforcing trust in their deal assessment. Their historical yield stands at an impressive 18.6% annually, which, although not predictive of future outcomes, speaks volumes of their competency.
With a management squad backed by profound expertise in institutional real estate investment, Cadre boasts of committee members with rich experiences from renowned firms like Vornado, Four Seasons Hotel & Resorts, Goldman Sachs, and Blackstone, to name a few.
Key Aspects of the Cadre Platform:
- Property Spectrum: Cadre showcases multifamily complexes, office spaces, retail units, and other commercial sites. A typical investment horizon with Cadre is around ten years to realize the utmost advantage.
- Regional Diversification: They target the top 15 U.S. growth cities, predominantly in the Sunbelt region, with cities like Atlanta, Charlotte, Dallas, Miami, and others such as Los Angeles and Seattle.
- Investment Threshold: For Cadre Funds, it’s $25,000, and for individual deals, it’s $50,000.
- Allocation Mechanism: Prospective investors can express interest in different investments. Post assessment of various factors, allocations are confirmed.
- Earnings Distribution: Properties’ returns are disbursed quarterly. Each investment’s performance dictates the exact distribution amount. Detailed financial documentation, including IRS Form K-1, is provided to investors.
- Customer Outreach: Cadre’s support team is accessible via email or phone from 9 am to 6 pm ET on weekdays.
Journey with Cadre
Exclusive to accredited investors, to be eligible, you’d either need a net worth (excluding primary residence) of $1 million, solo or with a spouse, or exhibit an annual earning of $200,000+ ($300,000+ for joint filings) sustained over the last two years and expected in the ongoing year.
This positions Cadre as a potential avenue for affluent individuals aiming to broaden their investment base without the legwork of evaluating property deals.
Cadre presents two investment routes: Cadre Funds, offering a mixed property portfolio, and Deal-by-Deal, granting more autonomy over investments. When you invest through Cadre Funds, you’re essentially partaking in properties also available for individual deals.
Each Cadre proposition undergoes rigorous evaluation, ensuring you’re presented with the best.
Understanding Cadre’s Financial Dynamics
Investors incur two sets of fees: An immediate 1%-3% of the gross investment and a yearly 1.5%-2% of the net asset value. Additionally, Cadre negotiates a percentage of the sponsor’s profits upon the culmination of a deal.
While this might seem like a sizable chunk from your prospective gains, it aligns Cadre’s interests with successful deal completions and overachieving their performance benchmarks.
Kickstarting Your Cadre Journey
Potential investors can initiate their Cadre experience online. The sign-up process involves confirming your accredited investor status, furnishing basic details, and answering a set of questions to gauge your investment outlook. Account linkage to a bank is essential for funding your investments.
A crucial step before initiating investments is verification. You’d need to establish your identity and validate your accredited investor status.
Setting the Right Cadre Expectations
It’s crucial to align your investment expectations. Cadre investments aren’t as fluid as some other platforms, with deals typically spanning five to ten years. Yet, they do provide a secondary market, albeit with some caveats.
Weighing the Good with the Not-so-Good
Pros:
- Rigorous Vetting: Cadre’s comprehensive assessment ensures top-tier deals.
- Promising Return Prospects: With a history showcasing 18.2% returns, their track record is commendable.
- Unlocking Commercial Deals: Cadre renders high-value commercial projects accessible.
Cons:
- Brief Track Record: Despite being in operation since 2014, the long nature of deals means fewer completed projects to evaluate.
- Liquidity Challenges: The quarterly secondary market doesn’t guarantee optimal liquidity.
- Limited Choices: Their emphasis on quality translates to fewer deals at any given time.
- High Entry
