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If you want to create a sound and diversified investment portfolio, you should consider real estate. One of the many reasons is that this asset class has a low correlation to other popular assets such as stocks and bonds.
There are many benefits associated with investing in real estate; such as passive income, tax advantages, diversification, cash flow, and leverage. Real estate allows investors to access investments that historically have generated excellent returns.
And that’s where Cadre comes into play.
In this Cadre review, we’ll have a deeper look into the available features, how to open an account, and its pricing and fees. We also check out the pros and cons and who this platform is for.
on Cadre’s website
Quick Summary: Cadre is a real estate crowdfunding platform allowing accredited investors access to commercial real estate investment opportunities. Cadre was founded by Ryan Williams in 2014.
What Is Cadre?
Cadre is a real estate investment platform that provides accredited investors with access to institutional-level commercial real estate. The innovative company launched in 2015 and relies on proprietary technology as well as industry experience to find the best investment opportunities, match them to the platform’s members, and generate outsized risk-adjusted returns.
The company has a short but intriguing track record and offers multiple ways to invest. The management team and its employees also invest, which shows that they believe in the deals they source. With its transparent and engaging user experience, Cadre can be an exciting alternative for your real estate investments.
How Does Cadre Work?
After opening an account, accredited investors can browse the few available offerings and invest alongside the management team and Cadre’s employees. The investment options currently include standalone deals as well as a diversified fund. All deals are created as separate entities and are safe even if the parent company undergoes financial distress.
Cadre has an extensive due diligence process and relies heavily on technology and data analysis to source only the very best commercial real estate investments nationwide. The company always aims to identify the most promising high-profile markets with excellent fundamentals. Ultimately, less than 5% will make it on the platform as Cadre prefers quality over quantity.
How to Open a Cadre Account
If you want to open a Cadre account, the process only takes two minutes and is straightforward. Simply click on “Get Started” on the website.
You will then be redirected and must answer two short questions about what kind of investor you are and whether you are accredited or not. From there, you are required to enter your full name, phone number, and country of residence. Once you are done, you get access to the platform and its listings. You will also get an email from the Investor Relations Team to set up an intro call if you need one.
However, you will only be able to invest if you are an accredited investor. Generally, you are accredited if one of the following criteria is true:
- Annual income greater than $200,000 for the last two years
- Joint household income of more than $300,000 for the last two years
- Net worth of $1 million (excluding your primary residence)
The company wants investors to reach their investment goals and offers multiple ways to achieve them. From beginner-friendly portfolios to standalone deals to secondary market options, Cadre provides features real estate investors are looking for.
|Account Fees||1.50% (asset management fee), up to 0.50% (administration fee), up to 3.50% (commitment fee) and 1.00% (transaction fee)|
|Time Commitment||5+ years|
|Property Types||Commercial Real Estate (CRE)|
|Advertised Returns||18.2% (average returns)|
|Support||Phone (+1-800-356-4951) and Email ([email protected])|
When you invest with Cadre, the types of projects you can be involved in are multifamily apartment buildings, office space buildings, hotels, and industrial real estate. Depending on your investment strategy, you will invest in a mix of all these or focus on one specific category. Cadre relies heavily on technology to gain insights into the markets and properties and to ultimately find the best investment opportunities out there.
Cadre Direct Access Fund
The Cadre Direct Access Fund is the easier and faster one of two investment options to get started. It seeks to generate strong returns with downside protection, primarily applying a Value-Add strategy. Investors with at least $25,000 can invest in a diversified portfolio of institutional-quality real estate that targets 50% stable multifamily complexes and 50% office, industrial, and hotel properties. All investments are spread across top growth markets in the United States.
While multifamily properties are used to generate attractive risk-adjusted returns and downside protection, the other half aims to deliver high returns due to market recovery. To find quality properties, the company relies on fifteen high-potential markets. These so-called Cadre 15 combine attractive returns with relative affordability.
If you want to select your deals yourself, then Cadre Deal-by-Deal is for you. That way, you can exercise much more control over your portfolio and invest according to your strategy. As a standalone deal investor, you can stay on the lookout for suitable properties and pull the trigger when a perfect opportunity comes along. Still, you need $50,000 as a minimum investment.
Currently, Cadre Deal-by-Deal offers three different investment types: Cadre Fund Co-Investments, Opportunity Zones, and the Secondary Market.
Because the company knows some investors prefer to pick their investments, they usually allocate a portion of their investments for them. In addition, investors looking for deals that offer tax benefits (such as deferred and/or reduced capital gains tax) should look into the OZ program. Ultimately, investors can purchase positions from sellers once per quarter at a discount rate on the platform’s secondary market.
Cadre Performance and Record
We will provide you with a few numbers here to get a feel for Cadre’s investment performance. The company acquired 40 deals in 21 markets while investing more than $3.5 billion and returning over $184 million to investors.
What’s most impressive, though, is the historic internal rate of return (IRR) of 18.2%. Although only four investments have been fully realized, the actual IRR has consistently outperformed the underwritten or targeted IRR. The realized returns range from 15% to 27.4%. However, keep in mind that these returns aren’t guaranteed and only show the company’s track record so far.
Once you are invested either in the Cadre Direct Access Fund or any standalone deal on the platform, you will receive distributions. Your first cash distribution usually arrives three to five months after the initial close.
From there, you will be paid quarterly distributions, which are paid out around six weeks after the end of every quarter. Still, the timing can slightly vary depending on the involved parties. Distributions typically come from the operating cash flow and will be deposited directly into your bank account. You will also be able to track these distributions through your investor account and can opt to receive distribution notifications.
Cadre Secondary Market
Usually, investors have to lock up their money for five to ten years when investing in commercial real estate. Not with Cadre. Thanks to its Secondary Market, investors can sell and buy select assets during the two-week buyer window every quarter on the platform.
The initial hold period is only six months which provides excellent flexibility. Moreover, buyers have the chance to get a 5% discount on the latest Net Asset Value when entering an investment on the Secondary Market. Plus, Secondary Market investors have more valuable knowledge of the deal’s performance and are closer to the exit stage. Still, limitations apply, and liquidity can’t be guaranteed.
With Cadre, you can also invest in so-called Opportunity Zones. Since 2017, the government has been encouraging investors to deploy money in designated low-income census areas and providing tax benefits in return.
Suppose you invest your capital gains in these zones. In that case, you might benefit from the deferral or reduction of your capital gains tax. You may even be able to eliminate 100% of your taxes if you hold the Opportunity Zones investment for 10+ years. The latter is also the reason why so many Opportunity Zones projects have hold periods of more than ten years.
Once you sign up with Cadre, the platform automatically creates a Cadre Cash account for you which is provided by Evolve Bank & Trust (an FDIC member). That way, you can fund your real estate investments using your interest-bearing cash account. This also allows you to deposit and withdraw money regularly.
Cadre Cash Account
The benefits of the Cadres Cash account are also very positive: FDIC-insured up to $750k through Cadre’s partner banks. No fees or charges for withdrawals, deposits, and transfers. A cash position helps reduce your risk as it isn’t invested in the stock market.
Cadre Pricing and Fees
Cadre charges investors different fees depending on the investment they choose. Therefore, understanding Cadre’s pricing and fee structure is vital before investing.
If you invest $100,000 in the Direct Access Fund, for example, Cadre charges a one-time commitment fee of 3.0% upfront, an annual administration fee of 0.5%, and an annual asset management fee of 1.5%. At least there is no performance fee to pay.
In contrast, Deal-by-Deal investors must pay a transaction fee of 1.0% of the share price and an annual asset management fee of around 1.5% on the equity value invested on the platform. However, this fee is deducted from the distributed cash flow.
Also, when buying or selling assets on the Secondary Market, Cadre asks 1.5% from the buyer as well as the seller.
The company states that the integrity and security of the data of its members is a top priority. That’s why they follow industry standards and look at potential threats from three angles: physical security, corporate IT security, and production security.
Moreover, your investments with Cadre are safe as every deal is a separate legal entity. So, in case the company goes bankrupt, your investments won’t be at risk because management can’t use your stakes to pay their obligations. Besides, real estate developers manage the properties instead of Cadre.
The only aspects that could be interrupted are the payout of distributions and documents to investors, as Cadre handles these. But this would only last until a new managerial firm is found.
Cadre Customer Support
There are three ways you can get in touch with Cadre’s customer service. The company’s business hours to respond to your requests are between 9 am and 6 pm EST from Monday through Friday.
You can send an email either to your assigned sales representative or to the general investor relations address. Moreover, you can reach out to Cadre via phone. Unfortunately, other options such as a webchat are not offered at the moment.
- Cadre provides access to institutional-level real estate
- The management team has massive experience in the financial industry
- Investors can choose between a fund and standalone deals
- Management and employees have skin in the game
- Short but Strong track record and high returns
- Liquidity through a Secondary Market
- Investments can be placed in Opportunity Zones
- Very thorough due diligence and selective vetting process
- Only open to accredited investors
- Liquidity isn’t guaranteed
- $50,000 minimum investment for standalone deals
- Focus on quality over quantity leads to a low deal flow
Cadre does many things right in the eye of real estate investors, and the track record clearly illustrates that. However, you might also want to know what other platforms offer. Here are two alternatives:
A popular real estate investment alternative also open to non-accredited investors is the crowdfunding platform Fundrise. It allows you to invest in commercial and residential real estate portfolios similar to the Cadre Direct Access Fund.
However, costs are much lower. For example, its entry-level Starter Portfolio only requires a commitment of $10. That’s massively lower than Cadre’s $25,000 if you just want to invest in a diversified fund.
Unfortunately, Fundrise doesn’t offer any standalone deals. To further appeal to more advanced investors, the platform provides four additional account levels that unlock features such as IRA investing, a customized portfolio strategy, or access to private REITs.
Looking at the fees, you will find that Fundrise charges about 1% in fees, which is slightly lower than what Cadre charges. Still, Cadre’s realized IRR of 18.2% clearly outperforms Fundrise’s 10%, which justifies the higher fee. Read our full Fundrise review to learn more.
To compare Cadre to a similar platform, we included CrowdStreet. Like Cadre, CrowdStreet allows only accredited investors to back diversified funds and individual deals. Still, you can choose a professionally managed investment portfolio if you meet the platform’s criteria.
Both platforms have a similar historic return of 17.3% (CrowdStreet) and 18.2% (Cadre) and ask for a minimum investment of at least $25,000. One thing that clearly separates the two is that investors don’t pay any account or management fees on CrowdStreet. This is relatively unique and a huge benefit as you can invest more money. Read our full CrowdStreet review to learn more.
|Fees||1.50% (asset management fee), up to 0.50% (administration fee), up to 3.50% (commitment fee) and 1.00% (transaction fee)||1.0% per year||0.50% to 2.5% (Funds); Project fees vary|
|Promotion||None||Advisory fee waived (*12 months)||None|
|Highlight||Invest in individual real estate deals or funds||Access to private real estate deals||Access to commercial real estate investment opportunities|
|Best For||High net-worth individuals||Long term investors||High net-worth individuals|
Find out how Cadre stacks up against the competition.
Who Is Cadre Best For?
Cadre is best for high net worth accredited investors interested in adding commercial real estate to their portfolio or aiming to expand their current positions. Plus, they should have the financial resources to invest at least $25,000 to $50,000 from the start and deploy it for at least five years.
If you are looking for high returns while reducing your exposure to volatile stock markets, the company is also an exciting choice. Investing alongside financial experts and large financial institutions is something not many platforms offer. Depending on your strategy, you can choose between a diversified fund investment or standalone deals, including investments in Opportunity Zones.
Cadre Review FAQ
We know that you might want to know a bit more about Cadre and its offering. Therefore, we provided some FAQs and our answer below:
Is Cadre Safe?
First of all, no investment is 100% safe. However, Cadre does a great job of finding profitable investments and great deal sponsors. None of their separately created entities has lost any money so far, and their positive streak may continue. Plus, the company has tremendous financial knowledge and is trusted by various renowned financial institutions. These are excellent conditions for investors looking to dabble in real estate.
Is Cadre Only for Accredited Investors?
At the moment, yes. Cadre’s offered real estate investment opportunities are more sophisticated than public REITs and automated portfolio investments. That’s why the SEC restricts access to investors who have a lower need for protection as they are financially knowledgeable of unregistered securities.
How Does Cadre Make Money?
Cadre makes money by charging investors fees for investing on the platform. Their primary source of income are (upfront) one-time transaction fees, commitment fees, administration fees, and asset management fees.
Is Cadre a Good Investment?
If you have at least $25,000 to $50,000 to invest in real estate, Cadre is a player to consider. While real estate investments usually require a hold period of five to ten years, the company provides a Secondary Market if you need to end your position earlier. Plus, their realized returns consistently outperformed their targeted returns.
Does Cadre Offer a Secondary Market?
The short and sweet answer is yes. Investors have the chance to buy and sell investments once a quarter within a two-week window. However, liquidity and finding a match can’t be guaranteed. Moreover, you are required to pay a 1.5% transaction fee on the net asset value to Cadre, no matter if you are a buyer or seller.
When Does Cadre Distribute Dividends?
Distributions typically occur 3 to 5 months after the initial close of each deal. Quarterly distributions typically occur within 6 weeks after the end of each quarter.
Does Cadre Offer a Mobile App?
No, the company doesn’t have a mobile app at the moment. However, their website is mobile-optimized, making it easy to use your smartphone or tablet to browse investment options or track your distribution status.
In A Nutshell
- Minimum Investment: $25,000
- Fees:1.50% (asset management fee), up to 0.50% (administration fee), up to 3.50% (commitment fee) and 1.00% (transaction fee)
- Promotion: None
on Cadre’s website
Real estate is an essential part of a diversified portfolio. More often than not, commercial real estate provides excellent upside and allows you to create wealth. While this particular asset class was reserved for the ultra-wealthy until recently, platforms such as Cadre democratize the market and provide institutional-level real estate to investors.
Although the company’s track record is relatively short, with only four realized deals so far, the outlook for the future is exciting. Using technology and fundamental analysis is an excellent way to source only the best investments across the United States.
If you qualify as an accredited investor and have $25,000 available to invest, Cadre might be an exciting choice for your next real estate investment.
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Carsten is a Freelance Copywriter with a personal interest in money management and investing. Besides taking care of his investments, he loves traveling, reading books, and working out (calisthenics & yoga).