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Real estate investor Cadre scores strong exit on sale of two properties

Cadre, the financial technology company focused on real estate investing, announced the sale of two properties on Tuesday, confirming the robustness of its platform.

The Company sold Lincoln Place, a 240-unit multi-family home in Sacramento, California, with support from 29th Street Capital, and the Lodge at Copperfield property, a 330-unit multi-family home in Houston, with support from Knightvest Capital, for more than $125 million together. The two deals are among the largest real estate sales in the company’s history.

The exit gave Cadre an internal rate of return of about 22% and nearly doubled investors’ money in about four years by selling two properties, Cadre said.

Cadre CEO and founder Ryan Williams founded the private equity real estate investment firm after growing up in a middle-class family in Baton Rouge, La. and getting jobs at Goldman Sachs and the Blackstone Group early in his career.

“I was seized by my entrepreneurial spirit,” Williams said. “When I was at Blackstone and Goldman, I asked why Main Street investors couldn’t invest in their funds. I didn’t get any good answers, except that it’s too difficult to reach the masses.”

He then set out to build a financial technology platform that could function in some ways like a real estate private equity fund, but also allow individuals to participate through a website to diversify their portfolio into alternatives.

Cadre focuses on high quality, return-oriented investment opportunities and is accessible through its digital platform.

Cadre is exploring some offerings for ordinary investors – not just wealthier accredited investors – possibly in the form of registered funds. According to a source, the company is currently hiring for the product and plans to launch a new product in the next six to eight months.

While Cadre is backed by Goldman Sachs GS,
+2.56%,
the MacArthur Foundation and the Harvard University Foundation, it also accepts investments from individual investors, thereby weaving an element of crowdfunding into its fabric.

For now, the company is only targeting relatively wealthy people who meet the Securities and Exchange Commission’s accredited investor guidelines.

The SEC defines accredited investors as anyone who has had over $200,000 (or over $300,000 with a spouse) or net worth greater than $1 million excluding the value of their primary residence in each of the past two years.

Despite these limitations, Cadre now counts around 35,000 investors because it works with so many individuals. It has now sold nine properties, including those in Texas and California, to be announced on Tuesday.

Cadre initially raised more than $250 million with the support of Goldman Sachs and its wealthy clients. The company planned to launch its own fund, but that plan was initially shelved when the 2020 pandemic hit. Cadre then launched the Direct Access Fund in 2021 and has raised more than $300 million.

Williams founded Cadre in 2014 as a commercial real estate investment platform after working as an investment professional at Blackstone Group BX.
-0.88%
from 2012 to 2014 and from 2010 to 2012 technology, media and telecommunications businesses for Goldman Sachs.

The first home Williams ever owned was an investment property, which he bought in 2008 before Blackstone Group BX.
-0.88%
came into the space with the purchase of Invitation Homes. Beginning in 2009, he raised money from his Harvard College classmates and built a portfolio of 1,500-home single-family homes.

Cadre now includes rent-to-own opportunities for residents that Williams first developed in its earlier days.

“You can’t just buy houses and flip them and not help the community,” Williams said. “Community needs to be one of, if not the number one, focus when looking at real estate investing over the long term.”

In total, Cadre has completed approximately $4.5 billion in transactions and returned $300 million to its investors as a commercial real estate specialist.

Looking ahead, investment in workers’ housing remains Cadre’s bread and butter, with a focus on multi-family housing through partnerships with local property managers. It will also purchase industrial space and two subcategories of office space – suburban office space and life sciences office space. It avoids retail space and office space in major cities, which continue to lag behind amid the COVID-19 pandemic.

Cadre now has 100 employees on its payroll and the company expects to hire “significantly more” by the end of the year, Williams said. The company currently operates out of New York and Chicago and may add a third location.

https://www.marketwatch.com/story/real-estate-investor-cadre-scores-strong-exit-in-sale-of-two-properties-11650373391?rss=1&siteid=rss Real estate investor Cadre scores strong exit on sale of two properties

Brian Lowry

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