In 2014, just weeks following the official launch of Cadre, I jotted down two words that would be the foundation of my new company: selflessness and fearlessness. These words were the two values that had been crucial in every decision I made from my earliest days in Louisiana watching my family work tirelessly to build a better life for me, to my teenage years launching my own companies against all odds. For Cadre to similarly break convention and reinvent the real estate investing industry, we would need to build a culture that embraced these two values. With a fearless, selfless approach to all that we did, we would level the investing playing field for millions of individuals, unlocking a more prosperous financial future for each individual and partner in our “Cadre.”
Today I’m thrilled to announce a major milestone bringing us closer than ever towards this vision: I have decided to take on the roles of Executive Chairman and Co-Chairman of our Global Investment Committee. These roles will allow me to focus significantly more of my time on the key strategic drivers of Cadre’s future growth – partnerships and new products, while also accelerating our philanthropic initiatives to promote greater diversity and inclusion in the real estate industry. For our next chapter, I have chosen Jared Kaplan as Cadre’s newest CEO to work closely alongside me. I can’t think of anyone better suited to join and help lead our team in this exciting new phase in our growth.
THE FIRST TWO CHAPTERS OF THE CADRE JOURNEY
The first chapter of our ambitious journey began in 2014 when we set out to build the leading platform for online real estate investing. We worked determinedly to expand access to top-quality investments through an innovative digital investment platform – complete with revolutionary features such as the Cadre secondary marketplace, the industry’s first liquidity exchange for real estate investing. In just a few years we grew our client base to thousands of accredited investor accounts, delivered outsized returns to our clients, and launched unprecedented investment partnerships with global institutions such as Goldman Sachs. By late 2018, we had established the leading online platform for real estate investing – the only platform in which individuals could invest directly alongside preeminent institutions.
Our next chapter began in early 2019 — a chapter marked by the expansion of investment access to more individuals than ever before. We launched a lower minimum portfolio product, the Cadre Managed Portfolio, providing thousands of individuals with investment diversification in an array of real estate offerings for as little as $10,000 per property. Following the success of this product, we battled through the uncertainty of a once in a generation pandemic and launched the Cadre Direct Access Fund. This fund-like product gave individuals and institutions a chance to invest side by side in a curated portfolio of assets with even lower fees and even lower minimums at less than $2,000 per property. We reached thousands more individual investors through this product, explored opportunities with dozens of new operators, and secured investment commitments from leading institutions such as BlackRock, Harvard University, The JPB Foundation, MacArthur Foundation, and others.
And we didn’t stop there. In late 2021, we launched the Cadre Marketplace, opening access to a wider base of operators by offering capital for both primary and secondary investments. In Q1 2022, we achieved our strongest quarter since founding, ultimately propelling Cadre to $5 billion of closed real estate assets on our platform, generating north of 25% net annualized returns1, and returning more than $400 million in capital back to our investors2.
LOOKING AHEAD TO OUR NEXT CHAPTER OF GROWTH
Now we enter our next chapter. This chapter will be centered on offering an even wider universe of individuals access to an array of investments at our lowest entry points to date. We are taking our greatest steps forward in democratizing access to investing by including non-accredited investors for the first time ever so that individuals will be able to diversify their portfolios outside of stocks, bonds and crypto. Our addressable investor base will increase to more than 100 million individuals, and our operator base will grow from dozens of established operators to hundreds of established and emerging operators.
Like each previous chapter, we will be successful going forward by embracing our core values of selflessness and fearlessness. Reflecting on these specific values at this stage in our journey, I must personally focus my full efforts on where I can bring our company the greatest value. After thinking long and hard, I decided that the best way to bring the most value in this chapter of our journey is in a new capacity as Executive Chairman and Co-Chairman of our Global Investment Committee. I will now focus my time on securing and launching new investment partnerships with institutions, closing new financing arrangements, incubating new investment products, developing our long-term product roadmap, and accelerating the diversity of our partner base through the launch of the Cadre Foundation.
Our next CEO, Jared Kaplan, is an amazing partner who brings deep operational experience scaling financial products and services through consumer channels. His operational expertise in the direct-to-consumer space will complement my enterprise and business development partnership skill set. I ultimately hired Jared after initially searching for a COO. After meeting Jared, I recognized that he was the strongest possible operator this chapter of Cadre’s journey. He brings a builder mentality and proven playbook for scaling promising companies in significant yet stodgy industries.
Jared has been the CEO of multiple companies, helping each scale in new ways to successful exits. Most recently, he ran a leading fintech company, OppFi, that he scaled by expanding credit access to 150 million consumers who were previously locked out of mainstream options, and he successfully took OppFi public through an IPO in 2021. Prior to OppFi, Jared founded Insureon, the leading online agency for small business insurance. At Insureon, Jared helped the company achieve over 1,700% revenue growth while building its customer base to more than 175,000 small businesses. Insureon was sold to Hub International and Bold Penguin in 2022. And while his operational credentials are clear, I am most excited about partnering with him because he exemplifies our core values of selflessness and fearlessness with passion for expanding access to financial products and services to the underserved.
SEIZING THE MOMENT, FOR CADRE AND OUR STAKEHOLDERS
For Cadre’s investors and partners, this moment of growth means more of what they have come to expect: highly curated, quality real estate investment opportunities in an otherwise volatile market; unprecedented liquidity in a historically illiquid market; and technological innovation in an antiquated field. We are better positioned than ever before to launch our next institutional fund product alongside our first-ever retail investment offering for non-accredited investors. We are also better positioned to broaden our alternative investment offerings and I can’t wait to support the successful launch of our next institutional fund, Cadre Direct Access Fund II, while also supporting Jared on growing our individual / retail investor focused offerings.
For the communities in which we invest, this next phase signals our continued commitment to being a thoughtful and positive actor, and embracing diversity, opportunity, and sustainable growth. It also marks a moment in which I will be even more involved in ensuring that capital and resources reach underserved communities around the country through the launch of our foundation.
For Cadre’s team, this is a reminder that even greater things are ahead. It reflects my belief that the best way to navigate challenges (and there have been plenty that we have worked through since our founding!) and opportunities is by staying true to our core values.
LEAVING A LASTING LEGACY
As we move forward, I’m reminded of where this journey all began for me: with memories as a child, walking through prosperous neighborhoods and comparing them to where I lived, seeing the stark difference that access to ownership of real estate meant for families in America. I never stopped believing that I could bring economic opportunity to forgotten communities that lacked ownership, despite others’ doubt. As I reflect on the current success of Cadre, I recall the words my grandfather told me when I was a young boy that “To whom much is given, much is required.” I have never forgotten where I came from and never will. I am humbled and guided by these memories to this day.
And as one of the few Black founders in real estate, finance, or technology, it is not lost on me that I write this having just marked the Juneteenth holiday and passed the two-year mark of George Floyd’s murder. These are painful reminders of the continued work we all must do to live up to the most sacred ideals of our country. I commit to using my voice and platform in my new roles to pursue solutions to economic and social inequities that have plagued communities around our country. I will raise my own family to believe that the American Dream belongs to each of us if we are willing to work hard to achieve it. The past nearly nine years of running Cadre have shown me that our collective future can be remarkable if each of us act with selflessness and fearlessness. At Cadre, this is our time to double down on our success. Together, Jared and I, along with our incredible team, will be giving 100% of ourselves to the work ahead, and I could not be more excited about writing Cadre’s next chapter – which I know will be our greatest yet.
Ryan A. Williams
1 - Annualized rate of return is an IRR calculation that represents an equity-weighted average annualized internal rate of return (IRR) for realized direct real estate investments offered by Cadre since the formation of our Investment Committee through to the date of calculation, after deduction of fees and expenses. For recently realized investments, an estimate of proceeds to vehicles managed by Cadre may be used. The use of a different methodology may result in a materially different return metric. Please see https://cadre.com/track-record/ for additional details and information.
2 - Capital returned to investors refers to the sum of income distributions, sales gains, and return of capital without deduction for any investor specific withholding or contribution interest.
The views expressed above are presented only for educational and informational purposes and are subject to change in the future. No specific securities or services are being promoted or offered herein.
This communication is not to be construed as investment, tax, or legal advice in relation to the relevant subject matter; investors must seek their own legal or other professional advice.
Performance Not Guaranteed
Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections are not guaranteed and may not reflect actual future performance.
Risk of Loss
All securities involve a high degree of risk and may result in partial or total loss of your investment.
Liquidity Not Guaranteed
Investments offered by Cadre are illiquid and there is never any guarantee that you will be able to exit your investments on the Secondary Market or at what price an exit (if any) will be achieved.
Not a Public Exchange
The Cadre Secondary Market is NOT a stock exchange or public securities exchange, there is no guarantee of liquidity and no guarantee that the Cadre Secondary Market will continue to operate or remain available to investors.
Opportunity Zones Disclosure
Any discussion regarding “Opportunity Zones” — including the viability of recycling proceeds from a sale or buyout — is based on advice received regarding the interpretation of provisions of the Tax Cut and Jobs Act of 2017 (the “Jobs Act”) and relevant guidances, including, among other things, two sets of proposed regulations and the final regulations issued by the IRS and Treasury Department in December of 2019. A number of unanswered questions still exist and various uncertainties remain as to the interpretation of the Jobs Act and the rules related to Opportunity Zones investments. We cannot predict what impact, if any, additional guidance, including future legislation, administrative rulings, or court decisions will have and there is risk that any investment marketed as an Opportunity Zone investment will not qualify for, and investors will not realize the benefits they expect from, an Opportunity Zone investment. We also cannot guarantee any specific benefit or outcome of any investment made in reliance upon the above.
Cadre makes no representations, express or implied, regarding the accuracy or completeness of this information, and the reader accepts all risks in relying on the above information for any purpose whatsoever. Any actual transactions described herein are for illustrative purposes only and, unless otherwise stated in the presentation, are presented as of underwriting and may not be indicative of actual performance. Transactions presented may have been selected based on a number of factors such as asset type, geography, or transaction date, among others. Certain information presented or relied upon in this presentation may have been obtained from third-party sources believed to be reliable, however, we do not guarantee the accuracy, completeness or fairness of the information presented.