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At its fundamental level, commercial real estate syndication is simply a group of investors who pool their capital to buy larger assets than they can afford individually. Normally, a general partner or partners operate the syndication to ensure ideal properties are included in the investment portfolio and mitigate the investors’ risks.
In much the way investors can buy a share in a mutual fund that holds a diversified collection of stocks, commercial real estate syndications allow investors to own a portion of a much larger asset or collection of assets. Syndications can invest in multiple types of commercial properties that individual investors otherwise can’t get access to, such as offices, retail space, industrial buildings, or student housing complexes on college campuses.
Rather than tying up capital in a single property because that’s all you can afford to invest in, syndications enable you to invest in shares of large commercial properties to reap greater rewards while mitigating risks more effectively.
Further, you’ll benefit from the expertise of a local real estate expert who has analyzed hundreds of properties to find ideal candidates for the syndication. All of this adds up to lower risks, higher yields, and a far more secure means of investing in commercial real estate.
Allocating your hard-earned capital to a commercial real estate syndication can be a highly lucrative investment, but due diligence is important—not all syndications are equal. Let’s cover some of the key elements of commercial real estate syndications to conduct due diligence on before investing.
There are a variety of ways that commercial real estate syndications can be structured.
For most, offerings should be as simple as possible with complete transparency, so no one is ever confused during the investment process.
Equity Or Promote
Commercial real estate syndications can be divided between the general and limited partners in a variety of ways. Earnings may go to the general partner as straight equity or an earned promote (percentage of the profit).
Other commercial real estate syndications may provide a preferred return to the investors. This is the minimum return on the deal that must be attained before the sponsor can receive earnings. These can be referred to as a “pref”, and are often paid out on a monthly or quarterly basis.
Every commercial real estate syndication is different, so take the time to ensure the syndication you invest with has the same investment philosophies as you. The better this match is, the more closely your investments will meet your expectations.
Saint Investment Group provides streamlined access to real estate opportunities previously reserved for only the wealthiest investors. Featuring unique investments, hassle-free access, and an optimal blend of diversification and performance, our commercial real estate syndication has been thoughtfully designed to serve our investor’s interests in every way possible.
Some of the risks of investing in syndications include:
Always be sure to do your own due diligence to fully understand the risks involved and steer clear of these major issues. Look for experienced deal sponsors with a strong track record of successful projects like Saint Investment Group to ensure there’s no need to worry about these scenarios.
Steady rent payments every month provide a consistent source of passive income for those who invest in commercial real estate syndications.
Buying properties in up-and-coming markets to renovate them and lease them out to businesses moving into the area is an excellent way to increase asset value and command higher lease prices. However, be careful! In real estate investment, being too early is often the same as being wrong.
The same properties that make good candidates for renovation and leasing at higher rates are also excellent for faster sales to start on the next property, providing more income potential.
The commercial real estate syndication operated by Saint Investment Group can deliver more robust capital preservation and hedge against volatility far more effectively than investing in a single property.
When years of real estate experience and continual in-depth market research are combined, syndication sponsors like Saint Investment Group can source the most attractive commercial real estate properties and secure them before the competition, providing you premier access to the best investment on the market.
Commercial real estate syndications allow you to invest more passively as seasoned experts deal with all aspects of the assets that secure your investment, including everything from the acquisition, to renovating the property, to selling the property, and managing rent collections from tenants.
When you demand diversification that delivers secure, predictable, and strong returns on your capital, commercial real estate syndication funds are one of the ideal options for accredited investors who expect more. Saint Investment Group can help you embark on your commercial real estate investment journey with a solid footing and transparent performance reporting.
Call (323) 483-0291 and speak to a member of our team today and learn what the commercial real estate market has to offer you. Saint Investment Group is here to match you with the perfect portfolio addition for your investment goals!
A commercial real estate syndication is a type of venture in which a group of individuals acquire and manage commercial real estate holdings. The investment is handled by a sponsor or general partner who is responsible for sourcing, acquiring, and maintaining the properties, while investors or limited partners contribute the funds and share the profits created by the properties.
A commercial real estate syndicate aims to create passive income and maybe realize capital appreciation.
The sponsor or general partner in a real estate syndication is responsible for leading the investment opportunity and managing the day-to-day operations of the properties. This includes sourcing new investment opportunities, negotiating deals, securing financing, managing the properties, and making decisions about the distribution of profits to investors. The sponsor typically receives a management fee for their services, as well as a percentage of the profits generated by the properties. They also assume a greater level of liability and risk compared to the limited partners.
Investing in a commercial real estate syndication offers several benefits, including access to professionally managed, income-generating commercial real estate properties. It also allows for passive investment, as the day-to-day management of the properties is handled by the sponsor. Additionally, investing in a commercial real estate syndication can provide the opportunity for diversification of an investment portfolio, as well as the potential for higher returns compared to traditional fixed-income investments. By pooling resources with other investors, an individual can also gain access to larger and more lucrative investment opportunities that they may not be able to pursue on their own.
A master in Investment, Marketing, and Capital Raising.
Nic has honed his focus on the Real Estate and debt markets with Saint Investment Group and pursues large-scale Distressed Asset purchases with his partners and syndications.