Investors Add Commercial Real Estate to Retirement Portfolios After Volatile Year for Traditional Strategies
.svg){kind=logo}
.svg)
.svg){kind=logo}
.png)
Cadre Launches IRA Solution to Provide Tax-Advantaged Retirement Investing
Cadre, a leading technology-driven real estate investment manager, announced the launch of an individual retirement account (IRA) solution, allowing investors to allocate their IRA funds into commercial real estate (CRE) through the Cadre platform. The real estate firm expects the new investment option will continue to expand access to CRE – an often tax-advantaged asset class with longer investment periods and attractive risk-adjusted returns relative to equities.[1]
Cadre’s new product provides a solution for IRA investors who experienced a historically challenging year in 2022. According to the Investment Company Institute, U.S. retirement market assets fell more than 18% and lost ~$7.1 trillion between Q1 and Q3 2022.[2] IRAs accounted for the majority of retirement assets over this period, holding over $11 trillion assets with the majority allocated to equity funds. Over the same time period, the S&P 500 index (representing average equity performance) fell more than 13% while the NCREIF Property Index (representing average private commercial real estate performance) rose 9.13%[3].[4]
“Expanding our platform to accept IRA dollars is another milestone in Cadre’s long history of meeting investor demands and needs”
CRE typically features more stability and longer holding periods than traditional IRA investments like equities, making it a fit for many investors hoping to harvest returns for retirement. During recent market drawdowns like the Great Financial Crisis and Dot-Com recession, equities lost an average of ~36% in value. Private real estate, meanwhile, averaged a 31.86% gain over the same periods[5].[6]
“I founded Cadre to provide more individuals with a tax-efficient tool that institutions and ultra high-net-worth investors have traditionally used to build wealth,” said Ryan Williams, Founder and Executive Chairman of Cadre. “By equipping investors with the ability to invest their IRA dollars, we aim to expand access to diversified, robust retirement portfolios – and by extension, generational wealth.”
Cadre’s IRA solution follows the launch of the Cadre Horizon Fund in 2022, now allowing retirement-focused investors to allocate IRA dollars into the Fund using Cadre’s online platform. The Cadre Horizon Fund can be held with a number of leading IRA custodians, including The Entrust Group, Equity Trust Company, and Millennium Trust Company. Interested investors can work with Cadre’s Investor Relations team to navigate the allocation process and check Cadre’s compatibility with other preferred IRA custodians.
“Expanding our platform to accept IRA dollars is another milestone in Cadre’s long history of meeting investor demands and needs,” said Jared Kaplan, Cadre CEO. “We are grateful to our many existing partners that have helped make such a timely innovation possible.”
About Cadre
Cadre is a commercial real estate investment manager that invests alongside individuals and institutions on our tech-driven platform. As a fiduciary, we have a distinct responsibility to investors. Our highly disciplined process features innovations in market selection, asset management, and rigorous due diligence. We are committed to expanding access to this essential asset class, which has long contributed to legacy wealth.
Since inception, Cadre has earned investors 27.6%[7] realized net IRR in $4 billion of real estate transactions across the U.S.[8] To learn more about Cadre and view the full track record and important disclosures, visit cadre.com/track-record.
- Bloomberg and NCREIF. Historical refers to a 20-year time period, beginning December 31, 1999 and ending December 31, 2019. Commercial real estate is represented by the NCREIF Open-End Diversified Core (ODCE) Index, an equal weighted, time weighted index representing a blended portfolio of institutional-quality real estate funds reported net of management and advisory fees. The S&P 500 Index represents an unmanaged index of the 500 largest stocks (in terms of market value), weighted by market capitalization and considered representative of the broader stock market. Indices are unmanaged and investors cannot invest directly in an index. Unless otherwise noted, performance of indices does not account for any fees, commissions or other expenses that would be incurred. ↩︎
- Investment Company Institute, Q3 Quarterly Retirement Market Data for the time period 1/1/2022 - 9/30/2022. ↩︎
- YCharts, S&P 500 Index Returns for the time period 1/1/2022 - 9/30/2022. ↩︎
- NCREIF Property Index total returns for all property types for the time period 1/1/2022 - 9/30/2022. ↩︎
- YCharts, S&P 500 Index Returns for the time periods 1/1/2001 - 3/31/2003 and 10/1/2007 - 3/31/2009. ↩︎
- NAREIT, Private Real Estate Index Returns for the time periods 1/1/2001 - 3/31/2003 and 10/1/2007 - 3/31/2009. ↩︎
- Data as of December 31, 2022. IRR calculation represents an equity-weighted average annualized internal rate of return (IRR) for all single-asset realized real estate investments of offerings firm-wide by Cadre since the formation of our Investment Committee on March 31, 2016, through to the date of calculation, after deduction of fees and expenses. Calculations assume no fee breaks or concessions were applied to any underlying offering. Equity multiple represents the investment multiple on equity, which is calculated by dividing the aggregate realized proceeds for the applicable investment after deduction of fees and expenses. Realized and updated target returns are inclusive of all of Cadre’s completed dispositions. Realized returns are subject to change following final distributions on sold assets. Calculations are generally made as of the date of the sale of the applicable asset and may include targeted proceeds that are to be distributed to the vehicles managed by Cadre (but which have not been realized by the vehicle as of the date of calculation). The calculation of net return figures for each investment pertains to single-asset investment vehicles only. The calculation of net return figures for each investment in a multi-investment fund vehicle is difficult, if not impossible, to prepare with accuracy due to the estimation of fund-wide expenses and other variable fees applicable to each investment that are necessary for such calculations. Returns reflect net performance and are not audited. Other vehicles, such as the Cadre Direct Access Fund LP and parallel vehicles, are also participants in these investments. ↩︎
- Gross Distributions to Investors refers to the sum of any income distributions, sale gains, and return of capital without deduction for any investor-specific withholding or preferred equity payments. Updated on September 30, 2022. ↩︎
Disclaimer
Educational Communication
Not AdviceThe 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.
Not Advice
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.
No U.S. or foreign securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through us.
.svg)
