Introducing Cadre Secondary Market and Cadre Managed Portfolio
These two initiatives mark the latest milestones in what has been a highly productive year at Cadre. We have more than doubled the number of investors on our platform, closed a $250 million partnership with Goldman Sachs’ private client group, and reached $1.5 billion in transaction volume. Most importantly, we continue to win the trust of our clients: on average, Cadre investors invest in over three opportunities with an average portfolio of $1.3 million of capital per investor.
Cadre Secondary Market
Commercial real estate has historically been one of the strongest performing asset classes. As we discussed in our recent article Are the Returns You’re Seeing Realistic?, over the last 20 years, commercial real estate investment returns have outperformed the S&P 500 at less than half the volatility. However, long hold periods for private real estate investments mean any invested capital is tied up until the asset is sold, which can be up to 10 years. This reduces flexibility and limits many investors’ willingness to participate in these opportunities.
With the launch of Cadre Secondary Market, our clients can now seek to sell their investment only a year after they initially invest.
By developing a secondary market, Cadre is accelerating the potential for investors to have liquidity. In turn, our clients can now invest with greater comfort and flexibility knowing they may seek a buyer for their position directly on our platform.
Not only is Cadre Secondary Market a unique liquidity benefit for our clients, it also represents a major step toward our ultimate vision: to build the preeminent platform for the buying and selling of alternative assets.
In limited pilots to date, we have successfully closed more than 40 trades ranging in size from small individual positions to multi-million dollar blocks. Now, we are bringing Cadre Secondary Market to our entire investor base with a seamless and transparent online experience.
Cadre Managed Portfolio
Cadre Managed Portfolio offers a simpler and more diversified way for investors to build a real estate portfolio from day one. Historically, our clients have selected individual Cadre offerings that meet their investment goals. Based on client feedback, we have developed an automated diversification approach for our individual clients, an approach that is preferred by our larger institutional clients including Goldman Sachs.
Cadre Managed Portfolio allows clients to make a one-time commitment that is subsequently spread across 10 individual Cadre deals. We structured Cadre Managed Portfolio to accommodate lower per investment minimums of $25,000, the ability for clients to request to upsize into any deal that they particularly like, and no additional fees. Clients who enroll in the product fund their allocation for each investment over the course of roughly 12 months as we close individual deal opportunities.
Cadre Managed Portfolio clients will join more than $300 million in managed commitments that have recently been raised. And as with our deal-by-deal investors, Cadre Managed Portfolio participants will also have access to Cadre Secondary Market for each individual investment.
In all, Cadre Managed Portfolio is a streamlined way to develop and build a portfolio of institutional quality, direct commercial real estate opportunities, thus enabling a broader range of clients to efficiently invest in this asset class.
At the core, we understand that the key to a great investing experience is identifying great investment opportunities. While we will continue to deliver new products that improve our clients investing experience, we remain focused on leveraging our most unique capabilities to provide access to quality investment opportunities. Through our data-driven investing process, an investing team with over $50 billion of real estate experience, and a national network of more than 300 operating partners, we remain well-positioned to do just that.
To date, we have returned nearly $40 million of capital to our investors and we achieved a net realized return of 16%+ annualized on our first realized investment. By continuing to leverage a data-driven approach, investing experience, network of quality partners, and new and exciting product launches, we are confident that continued success for more investors lies ahead.
Update: September 19, 2019
Since publishing this article, we’ve lowered the one-time commitment to Cadre Managed Portfolio to $100,000, or $10,000 per investment over 12 months.