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Start-up of the Week: Aided by technology, Cadre democratizes the property investment game

Cadre’s innovative commercial real estate investment platform has the backing of venture capital giants, investment firms, real estate companies, and industry veterans

“Our innovative approach to private real estate investing allows individuals to invest in exclusive deals alongside global institutions,” states the United States-based Cadre, which uses predictive models and workflow tools to reengineer the real estate investment experience.

“Our real estate investment platform is distinguished in its ability to gather, analyze, and leverage information, with radical improvements in workflow efficiency,” the venture stated.

In today’s episode of ‘Start-up of the Week’, International Finance will discuss Cadre, which combines the investments team expertise and software engineering to identify target markets and asset classes “that have the potential for outperformance, due to secular growth, as well as demographic and economic diversity.”

Cadre In Nutshell

Cadre’s diverse leadership team has veterans from fields like real estate private equity, asset management, technology and engineering. The team’s ultimate goal is to enrich real estate investing, with a heavy pinch of technology.

“Their (the team’s) relentless drive to deliver compelling returns for our investors powers every investment decision. Millions of granular data points are ingested into Cadre’s real estate deal management software. These data insights provide a meaningful competitive edge, by enabling Cadre to more accurately identify trending locations and project rent growth. As a result, we can more quickly identify selective investment opportunities through our tech-enabled underwriting process,” the venture explained its operations in the following words.

Cadre has developed new technology for its in-house asset management team to more rapidly assess key financial and operating performance metrics, apart from optimizing the value of its holdings. By automating these complex tasks through technology, Cadre’s real estate investment professionals are successfully maximizing the value of the venture’s investors’ capital, apart from enhancing investor returns.

Cadre’s innovative commercial real estate investment platform has the backing of venture capital giants, investment firms, real estate companies, and industry veterans. Some of these entities are Goldman Sachs, BlackRock, Thrive Capital, SCS Financial, Andreessen Horowitz, Ford Foundation and the JPB Foundation.

Cadre, apart from developing a robust network of minority real estate developers and operators, is now building business partnerships with Minority-owned Depository Institutions (MDIs). Cadre’s business initiatives revolve around four principles, allocating investment capital to back minority-owned real estate operating partners, depositing corporate cash with minority-owned depository institutions, partnering with minority-owned banks to participate in financing Cadre’s properties, and maintaining a consistent number of affordable rental units for families within Cadre’s multifamily properties.

Since 2015, Cadre has acquired 50 deals across 25 markets in the United States. Apart from generating a strong overall operating performance, the venture’s realized investments have outperformed the underwritings too. The venture is currently managing a broad portfolio of institutional-quality commercial real estate assets across several classes and risk profiles in high-growth American markets.

Cadre’s Investment Strategy

Cadre’s investment strategy is divided into two parts, ‘Offerings’ and ‘Funds’. Under Cadre Direct Access Fund II, the start-up intends to follow a primary value-add strategy, where it will purchase assets in need of capital expenditures, improved operations, and/or lease-up, and may include ground-up development.

“We intend to allocate approximately 50% of the Fund’s capital to multifamily assets, which we believe can offer attractive risk-adjusted returns and downside protection, and 50% to industrial properties, well-occupied offices, and hotels that may provide greater upside potential. We believe that we can purchase institutional-quality assets at a discount to their long-term intrinsic value for the benefit of our investors in this Fund,” it stated, while adding, “Our team specializes in mid-cap investments. We believe that this target asset range offers the potential to discover attractive commercial real estate opportunities for inclusion in CDAF II.”

Then comes ‘Cadre Horizon Fund’, where the stakeholders (portfolio holders) can access core/core-plus commercial real estate investments across the United States through a diversified fund that seeks to acquire properties at a discount to recent pricing and replacement cost.

The Fund’s investment strategy pairs income generation with upside potential, an approach tailored specifically for the 21st century’s volatile property marketplace.

“We intend to allocate approximately half of the Fund’s assets to multifamily investments, and the other half to select investments in other property types. Multifamily assets have historically offered attractive risk-adjusted returns and downside protection, while investments in select industrial, office, and hotel assets may offer more upside potential,” the venture stated further.

Both CDAF II and Cadre Horizon Fund target institutional-quality multifamily real estate supplemented by select industrial, hotel, and office assets. All investments get individually selected for their potential to outperform, vetted by institutional-quality due diligence, and fully managed by Cadre’s Investments team.

Cadre In News

Cadre was featured in the Forbes’ ‘The Fintech 50 List 2021’. In the same year, the venture won the Wealthies Award for positively disrupting and democratizing the investment process in the real estate sector, following which it launched a USD 400 million fund targeting individual investors and underrepresented real estate operators.

Cadre CEO Ryan Williams has been hailed as a maverick in the real estate space.

Williams, who worked his way through Harvard University and launched his first real estate company during his senior year there, had stints at Goldman Sachs and Blackstone, before starting Cadre in 2014 as a digitized real estate investment platform. Using machine learning, analytics, and statistics, Cadre is now levelling the playing field in an industry that, till a few years back, was heavily tilted towards the big guns.

Individuals, groups and institutions willing to invest at least USD 50,000 can go through real estate projects listed on Cadre’s online marketplace. Cadre believes that commercial real estate has the scope to be an attractive financial safeguard against inflation, as it has been a more stable asset class than stocks or bonds, both of which are closely tied to market cycles.

Through its financial solutions, the venture is not only bringing down the wealth disparity in the property sector, but also making this particular investment space a lucrative one for those who want to further diversify their portfolios.

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