Cadre exists to help people build better financial futures. Our mission is to open up access to institutional-quality real estate investments and level the playing field. And while we leverage technology to make our platform and investments better, our team of incredibly talented and dedicated professionals is what makes Cadre special. The professional respect and personal friendships I have with our team make it gut wrenchingly difficult to share the news that we are reducing our headcount by 25 percent.
This decision was not the result of our performance. To the contrary, 2019 was Cadre’s best year ever, and we had an incredibly ambitious strategy to build on our success with new investment products and offerings in 2020. But like virtually every other sector and company, we are not immune to the impact of the COVID-19 pandemic.
Never before has the world been met with the kind of double threat to both physical safety and economic livelihood that this pandemic has created. While our current portfolio is holding up well thus far, we are navigating an environment in which real estate transactions have abruptly halted, and we can’t be certain how long this will last. We are confident that the recovery will present compelling opportunities for our investors, yet in the meantime we must reduce costs to streamline our core business, refine our future strategy, and position us to best capture these opportunities as they arise.
The decision to reduce our team was the hardest one I’ve ever had to make as CEO. We approached cost reductions by first reducing all areas of non-personnel spend, including executive compensation. After multiple weeks working through these cuts, we had to shift our lens to our team. We chose to make reductions with a focus on retaining critical skill sets required for our future business needs and goals. We carefully considered every role to ensure that we would be positioned to continue to deliver a superior investing experience for our clients.
I’m deeply grateful for the contributions of those who are no longer part of the Cadre team, and we want to make sure that the employees that helped get us to where we are today are supported through this departure. This is why we are committed to doing right by them with what we believe is a strong exit and benefits package; for example, we are providing all employees with 24 month extensions of the post-termination exercise period for option grants, which was important to me to ensure that everyone has the best opportunity to share in our growth and success going forward. We have also committed to covering health insurance costs for all departing team members through the end of the year, which was especially important to me given the enhanced health concerns we all share as a result of the pandemic.
I want to assure our current and future investors that these decisions will in no way compromise our service or our investment approach. In many ways, it’s the opposite. As we prepare for the opportunities ahead once the market begins to normalize, we are investing in our core business and actively working on a number of additional products that will further expand who can participate in direct commercial real estate investing. We will share more details on these opportunities soon.
Despite the extraordinary challenges the world is facing right now, we are confident that our mission of expanding access to quality real estate investments is enduring. In fact, despite the market “freeze” that is making new acquisitions challenging at the moment, we’re seeing strong interest from investors looking for access to commercial real estate as an alternative that offers a margin of safety and yield.
I want to close by thanking those who are leaving Cadre for their contributions to our mission. One of the best ways we feel that we can honor their work is to continue to build upon the foundation they established. That starts with delivering outstanding products to more investors so that they can take greater control of their financial futures. If we continue doing that, everyone in the Cadre family can be proud to know that they helped change the investing world for the better.
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.