Goldman clients are giving Cadre $250 million to pour into commercial real estate
by Connie Loizos (@cookie)
Cadre, a three-year-old, New York-based online platform helping accredited investors delve into commercial real estate deals in what it claims is a far more transparent way, has received a big vote of confidence from Goldman Sachs.
According to CEO Ryan Williams, Goldman’s private wealth clients are committing $250 million to the platform, money that will get funneled directly into a portfolio of real estate stakes assembled by Cadre.
The move isn’t a complete surprise for numerous reasons, beginning with Cadre’s ties to Goldman. Williams spent a couple of years at the bank right after getting his undergraduate degree from Harvard. Goldman also participated in the company’s $65 million Series C round, which was led by Andreessen Horowitz and closed last summer.
Cadre, which was cofounded by Joshua and Jared Kushner, has also been amassing a star cast of executives, including, most notably, Michael Fascitelli, formerly the CEO of Vornado Realty Trust. Fascitelli, who’d written an early seed-size check to Cadre, took over Cadre’s investment committee as its chair and senior adviser a year ago and he now approves all deals.
Either way, for Cadre — which invests directly in real estate assets, then passes its investment on to its clients for an upfront fee and a recurring subscription rate — the tie-up is a major coup. Not only does Cadre benefit from brand association with Goldman, but Goldman’s investor pool helps it move into new phases of its business, one of which seems to be creating a secondary marketplace.
Williams decline to delve into details in a call yesterday, but industry outlet The Real Deal reported last year that Cadre is creating an online platform where investors can trade their property stakesto other members of Cadre — a kind of private real estate stock market. Of course, to build a fluid marketplace, Cadre needed both access to properties and a much bigger pool of investors. Now, it would seem to have both. Cadre already works with more than 200 real estate operators who show it properties to buy — many of them multi-residential apartment buildings. With Goldman rolling out the red carpet to its high net worth clients, Cadre gets buyers onto its platform faster, too.
Williams did readily concede that Cadre has much more up its sleeve. In fact, he said that Goldman “isn’t partnering with us for the quality of our real estate offerings” but because an expanded range of offerings that it plans to roll out over time, including real assets like farm land, private equity investments, and even credit. “We want to create trust with our core product offering. But we ultimately plan to become a kind of superstore for alternative investments.”‘
Williams insists that the longer-term goal is to make the marketplace available to a much broader pool of investors, too. While today Cadre requires a minimum investment of $100,000 and works only with accredited investors, he says that focus is meant to “establish brand equity, credibility and trust” and expand from there once the model is proven out.
Cadre currently employs 75 people in New York, where the company is based.
It has so far raised more than $130 million from investors, including from billionaire investor Peter Thiel, famed VC Jim Breyer of Breyer Capital, the Ford Foundation, General Catalyst partners, Khosla Ventures, and Thrive Capital.
The company isn’t alone in trying to create a crowdfunded real estate marketplace; among its startup competitors is Fundrise and Realty Mogul. Fundrise has so far raised $55 million from investors, while Realty Mogul has raised $46.6 million.