Cadre is a real estate crowdfunding platform that primarily explores commercial real estate, making these opportunities available for accredited investors.
Our Cadre review will break down everything you need to know about the service so you can find out if it’s right for you.
Cadre offers these commercial real estate opportunities through proprietary technology, encouraging high-net-worth individuals to invest in a carefully selected portfolio of commercial properties.
The company aims to achieve outsized risk-adjusted returns while offering the most engaging and interactive user experiences.
Are crowdfunding platforms like the one Cadre offers worth the hassle, and how reputable is it when it comes to offering commercial real estate investment opportunities?
This comprehensive review will give you an idea of whether you should invest with Cadre today!
Cadre Review: Overview
Cadre was officially established in 2014 by CEO and co-founder Ryan Williams — a real estate specialist, who left his job at Blackstone Group to create the platform for any accredited investor seeking real estate investments.
Ryan Williams started Cadre with the company’s other co-founders Jared and Joshua Kushner, targeting wealthy investors looking for high-quality commercial real estate investments.
The real estate crowdfunding platform president is Allen Smith, the former president and CEO of Four Seasons.
More information on each core team member is available on the Cadre website.
Based in New York and boasting over 100 employees, Cadre is partnered with Goldman Sachs so its private management clients can invest through Cadre’s platform.
Venture capital stalwarts, like Khosla Ventures, have been investing in Cadre.
Also, many Cadre employees invest in several residential and commercial real estate cycles.
The company also has an experienced team of technology experts working with notable tech innovators like Square.
Cadre’s total owned transaction value has topped the $3 billion mark.
How Does Cadre Work?
Cadre does its own due diligence to filter legitimate real estate investment opportunities for accredited investors looking to improve their portfolio diversification.
However, the company is particularly tailored to investors making a high annual income, which sets a high minimum investment figure for any accredited investor looking to get involved.
Cadre’s platform uses technology, real-time data, and due diligence to vet investing opportunities on behalf of its investors.
The crowdfunding platform invests in various commercial buildings, industrial properties, hotels, and multi-family apartment buildings.
Cadre works to provide reputable investing opportunities by putting its own money into properties.
Compared to other platforms, Cadre goes deep into its level of due diligence to ensure that any new deal is top quality.
There are two ways you can invest with Cadre, direct access fund and deal-by deal-option.
Cadre’s Direct Access Fund
By using the direct access fund, you can automatically diversify your portfolio by looking into 15 potential growth markets across the United States.
These markets, according to Cadre, have emerged from post-pandemic dislocations.
Cadre’s Deal-by-Deal Option
Your alternative investing method with Cadre is the deal-by-deal option.
Investors seeking individual assets can search for available investing opportunities once they become members.
A new asset is launched once a month; meanwhile, secondary buyer windows are launched once every quarter.
Equity is served on a first-come, first-serve basis in both scenarios.
Secondary Markets and More Available to Investors
Alternatively, Cadre offers a secondary market to its investors.
Cadre focuses on providing investors with the potential for liquidity.
As a result, users investing through the real estate crowdfunding platform can exit any eligible assets during their secondary buyer windows.
This is in contrast to other crowdfunding platforms that will lock up your capital for years.
Who Qualifies to Use Cadre? Accredited Investors
To use Cadre, you must qualify as an accredited investor; also your net worth, or joint net worth with your partner, must exceed $1 million.
Any net equity in your primary residence can’t be included to make up the million dollar amount.
Furthermore, you must have an annual income of more than $200,000 in each of the last two years or a joint income of $300,000 with your spouse in the same period.
You must also maintain the same income level in the current year.
Is Cadre Legit?
Cadre is regarded as one of the more reputable real estate crowdfunding platforms of its kind.
The company has a high track record of identifying and acquiring great sponsors and properties.
In fact, Cadre acquired more than 38 assets through 20 different American markets, including four fully-realized multi-family apartment buildings.
Each of these investments has netted profits for investors, allowing them to outperform their original targets, with an underwritten internal rate of return (IRR) ranging from 11–15.1%.
Cadre is not a public entity with no stock market or SEC filings.
However, they have raised more than $135 million thanks to a bevy of top private investors ranging from Goldman Sachs to the Ford Foundation.
Due to its extensive due diligence processes, incentive structure, and the personal stakes held by its employees in every deal, Cadre touts a highly reputable platform where accredited investors can regularly capitalize on real estate investing opportunities.
Does Cadre Really Work?
The gross distributions to investors using the real estate crowdfunding platform tops the $168 million mark.
Additionally, Cadre reports an 18.2% historical rate of return each year.
Though this doesn’t guarantee that future returns will be strong, it assures real estate investors that they can potentially make good profits with every investment they make.
Cadre also boasted a rental collection rate of 95% throughout its investment portfolio in 2020.
This highlights the company’s investment quality despite the crippling economic effects of the global pandemic.
According to Cadre, the company holds zero debt, and it backstops every deal offered, meaning you won’t miss out on other investments if the one you’re involved in falls through.
The company bridges any funding gap to ensure deals successfully close within the marketplace.
What is the Minimum Investment for Cadre?
The minimum investment for Cadre in any stand-alone real estate investment deal is $50,000.
For the direct access fund, that minimum investment figure spans the entirety of the fund.
While for deal-by-deal investments, the minimum figure is for each deal.
Who Can Use Cadre?
Non-accredited investors cannot use the platform.
Stringent requirements are enforced during the vetting process to ensure investors and investments alike are up to scratch.
Given that Cadre specializes in long-term investments, other investors looking to get immediate returns might not find the platform the right fit.
Cadre requires that all potential investors provide documentation to verify their qualifications as accredited investors.
Investors must provide tax documents, such as their federal tax returns and W-2, financial statements, or a verification letter, to prove their credentials so they can start to invest.
If you’re trying to invest through your LLC, partnership, or trust, it must have accredited investor status to receive approval.
Accredited investors must fully own the entity, or its total assets should be at least $5 million.
What is Cadre’s Fee Structure?
A pair of fees are issued to everyone who chooses to invest with Cadre.
You pay 1% of your gross invested dollars upfront for every transaction, and you pay 1.5% of the net asset value recurring annual management fee.
Furthermore, Cadre negotiates a part of the sponsor promotion, a piece of any profits sponsors earn when a deal goes full circle after a few years before eventually selling.
Given that incentives are tied to the assurance that deals go full circle, thus, outperforming their targets, this is considered a friendly structure for investors.
Other platforms, meanwhile, are fully compensated once they get transactions funded.
How Do You Sell Cadre Investments?
Cadre’s deals are typically completed through their secondary market, with the buyer and seller each being charged 1.5% of the transaction’s net asset value.
Though deals are only being facilitated via Cadre’s secondary market at this time, management has stated that their long-term goal is to create a secondary marketplace involving crowdfunded real estate investment opportunities from other crowdfunding platforms.
What Do You Get with Cadre?
There are three types of deal-by-deal investments and a direct access fund that are accessible for high net worth individuals looking to invest in real estate opportunities seriously.
Cadre Fund Co-Investments – As new assets become available, most equity will go towards the access fund. The leftover money is set for individual investors who meet the $50,000 minimum investment threshold. All allocations are first-come, first-served until a deal is fully funded.
Opportunity Zone Investments– Cadre also provides opportunity zone investments, offering investors the chance to receive tax benefits. Opportunity zones allow investors the opportunity to defer their taxes on their realized capital gains from elsewhere, as long as their gains were invested within a 180-day window.
Opportunity zones also allow for the potential reduction of deferred taxes on deferred gains by as much as 10%. And investors can receive tax-free gains from a Quality Opportunity Fund investment if the investor holds his or her investment for at least ten years.
Secondary Market – Cadre’s secondary market is available for any investor who has owned an investment for at least six months. Once each quarter, a two-week buyer window is opened so investors can purchase positions from sellers on their platform. Investors can sell their total assets during the window.
However, the minimum partial sale is $50,000, with larger amounts increasing by increments of $5,000. If you choose to retain a portion of the asset, the investment that’s left must have a minimum value of $10,000.
Direct Access Fund
Value add returns are the focus of this fund, which targets established properties that range from $50-200 million.
It’s designed to generate consistent quarterly cash flows for investors, seeking out stable in-place tenants that are already bringing in cash flow for investors.
Once Cadre selects an investment, the platform actively manages it through operational improvements and any real estate project that involves renovation, boosting value in the process.
Cadre Review: Pros and Cons
Consistent Involvement – Cadre executives and employees involve themselves in every deal, using a deep vetting process to ensure every real estate investment opportunity on the platform is potentially beneficial for users.
Long-Term Value-Add – All financial incentives offered by the real estate crowdfunding entity are tied to the long-term performance of a deal rather than high transaction volume. Considering the outstanding returns that many have enjoyed when they invest in the platform, there is a high potential that a good investment is rewarded after a few years.
Secondary Market – Provides any accredited investor with the potential for liquidity, making it easy and convenient to sell real estate.
Technological Advancements – Cadre uses artificial intelligence to identify high-value investment opportunities for interested parties.
Due Diligence – Cadre’s due diligence is arguably as good as it gets within the real estate crowdfunding industry.
Strong Track Record – Their involvement in deals, the opportunities they provide, and the major companies that invest in them are evidence of a strong track record in the industry.
Minimum Investment – If you’re not an accredited investor and don’t make this kind of income, you’re best served to look elsewhere to invest in real estate.
Low Deal Flows – At around one deal a month, this could inconvenience you. You may not be able to find the right real estate deal for your needs whenever you’re ready to invest.
Lack of Highly Diversified Funds – They don’t offer any real estate investment trusts (REITs).
Cadre Review: Is Cadre Right For Me?
If you have more money lying around to spend and like the sheer amount of investment options Cadre provides, this may well be the option for you as you seek to diversify your portfolio properly.
If you want to start, you can open a cash account offered by their partner, Evolve Bank & Trust.
There are no fees, and the insurance provided by the FDIC’s Multi-Bank Program ($750,000) is three times higher than standard FDIC insurance you’d receive from a traditional bank.
Final Review: Is Cadre Worth It?
Cadre’s focus on ushering in a new era of institutional real estate opportunities has so far proven to be a worthwhile success.
Major players in the business back it, and the profits received on some deals have presented it as a top-tier investment platform.
Cadre’s resources are comprehensive, and the platform does a lot of the legwork for you.
Even better, Cadre offers the flexibility for investors to personally select their own investments on its platform.
And it’s this blend of freedom and support that makes the service so appealing to many high-net-worth investors.
If you have the money and are willing to play the long game, Cadre could strengthen your investment strategy.
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