The allure of real estate investing has been on a steady rise recently. It promises access to potentially high-yield markets and investments that once seemed elusive.
A notable niche within this domain is commercial real estate investing, and Cadre has emerged as a promising player.
This review delves deep into Cadre’s real estate investing platform, offering insights that may determine its alignment with your investment strategy.
Cadre at a Glance
Founded in 2014, Cadre zeroes in on quality, focusing on commercial real estate investments for accredited investors. They aim to democratize access to this sector for those who might find it challenging.
To date, Cadre boasts transactions in real estate valued around $4.7B.
Many platforms diversify with vast property portfolios, but Cadre’s selective method targets better yields by concentrating on high-growth markets.
Through rigorous manual checks, analytics, and technological interventions, Cadre earmarks lucrative ventures spanning offices, industrial spaces, hotels, and apartment complexes. A standout feature of Cadre is its skin in the game; the company directly invests in the properties. The impressive 18.6% yearly return rate underpins Cadre’s expertise, although future results remain unpredictable.
Cadre’s leadership is a consortium of real estate mavens, with most members boasting over 25 years of experience in renowned firms like Vornado, Four Seasons Hotel & Resorts, Goldman Sachs, and Blackstone, to name a few.
Understanding Cadre’s Platform
Some pivotal features of Cadre’s platform include:
- Investment Options: The platform offers investment avenues like apartment complexes, office spaces, retail estates, and more, recommending a ten-year hold for optimal gains.
- Geographical Scope: Cadre prioritizes top 15 growth markets in the U.S., predominantly in Sunbelt cities and others like Seattle, Washington DC, and Denver.
- Investment Thresholds: Investments start at $25,000 for Cadre Funds and $50,000 for individual deals.
- Allocation Procedure: Investors can submit non-binding allocation requests, post which allocations are decided based on timing, opportunity scale, and interest. Accepted applications segue into online subscription agreements requiring funding.
- Earnings Distribution: Quarterly income distributions are processed directly to bank accounts, contingent on each property’s performance. This income is reported to both the investor and the IRS via the IRS Form K-1.
- Customer Assistance: Cadre’s customer service operates weekdays from 9 am to 6 pm ET.
How Cadre Functions
Cadre exclusively serves accredited investors. Qualification criteria include:
- A net worth exceeding $1 million (excluding primary residence), either single-handedly or with a spouse.
- An annual income of at least $200,000 (or $300,000 for joint filers) for the past two years with the same expected for the current year.
This exclusivity positions Cadre as an attractive avenue for high net worth individuals seeking diverse, high-return investments without the hassle of property vetting.
Cadre’s Fee Structure
Cadre levies two sets of fees: an upfront fee (1-3% of gross investment) and an annual management fee (1.5-2% of net asset value). Additionally, Cadre negotiates a portion of the sponsor’s “promote” – a share of profits upon property sale.
Enrolling with Cadre
Potential investors can initiate their Cadre journey online. The process involves verifying accredited investor status, providing personal details, and responding to queries about investment preferences and financial standing.
Cadre’s Expectations
Before plunging into a Cadre deal, setting realistic expectations is paramount. Investments are typically long-term, spanning five to ten years, with Cadre dictating the sale price based on “Marked Value”. Exit strategies in secondary markets may not fetch desired returns, underscoring the importance of long-term commitment.
Pros and Cons of Cadre
Every investment platform has its merits and demerits. Cadre’s highlights include:
Pros:
- Rigorous Vetting: Cadre’s meticulous screening ensures premium deals.
- Potential for High Returns: Cadre’s past performance flaunts an attractive 18.2% return rate.
- Access to Major Commercial Projects: Cadre democratizes access to significant commercial real estate projects.
Cons:
- Limited Track Record: Despite being operational since 2014, Cadre’s long-term deals mean few have been completed.
- Liquidity Concerns: Cadre’s quarterly secondary market poses potential liquidity challenges.
- Limited Options: Emphasizing quality results in fewer deals, roughly one per month.
- High Entry Point: Apart from being an accredited investor, one needs a minimum of $25,000 to $50,000 to invest.
Who’s the Best Fit for Cadre?
Cadre beckons accredited investors seeking real estate diversification. The platform’s thorough vetting, coupled with its direct investment in projects, brings confidence to potential deals. However, individual due diligence remains crucial.
Closing Thoughts on Cadre
Commercial real estate, a traditional magnet for affluent investors, has been democratized by platforms like Cadre. Cadre’s distinct approach, underpinned by technology and data analytics, holds promise, especially for accredited investors.
