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November 30, 2016  

Joint-Venture Shop Eyes $1 Billion of Deals

A growing New York investment shop that primarily provides joint-venture equity is aiming to fund more than $1 billion of commercial real estate purchases in the coming year.

Cadre, launched two years ago by Ryan Williams and brothers Jared and Josh Kushner, supplies equity to investors that have lined up acquisitions. Using a $250 million capital commitment from an unidentified family office, the firm typically provides equity up front, then syndicates the deal to a stable of pre-approved investors.

Those investors include nearly 200 wealthy individuals and institutions. All go through a vetting process to qualify for access to the firm’s web-based platform, where they can choose to participate in any of Cadre’s individual deals.

Williams, who is chief executive, says Cadre was formed to provide “an alternative to the primarily large, institutional fund model for folks that wanted . . . the same quality of institutional-level deals.” Participating investors can put as little as $500,000 or as much as $10 million into individual transactions. That maximum could rise to $25 million as deal flow increases.

Cadre has partnered on some $500 million of acquisitions to date and has several hundred million dollars worth of deals pending. It expects to invest in at least another $1 billion of purchases over the next 12 months.

Its last five deals had average acquisition prices of nearly $100 million, with Cadre providing 80% of the equity. Its geographic focus is on major markets in the Northeast, the Mid-Atlantic and the West.

Williams said Cadre’s roster of hundreds of vetted investors gives the company the ability to act quickly. The firm touts what it describes as an attractive fee structure as well as the depth of its industry relationships.

Jared Kushner, who heads New York real estate investment shop Kushner Cos., is the son-in-law of President-elect Donald Trump. Josh Kushner is the founder of New York venture-capital firm Thrive Capital. Williams had prior stints in the real estate groups at Blackstone and Goldman Sachs.

Cadre’s acquisition team is led by Marcos Alvarado, a Starwood Capital alumnus who joined the firm this summer. Dan Rosenbloom came aboard this month from Chicago fund shop GEM Realty as a managing director of acquisitions.

The investment staff also includes former Baupost Group principal Tom Stults and former Starwood pro Michael Lefton. Former Vornado Realty chief executive Michael Fascitelli is an advisor to the firm and sits on its investment committee.

In addition to its primary strategy of investing via joint ventures, Cadre may look to buy properties outright and sell off stakes to its investors. The firm also has begun raising equity from some of its larger investors for separately managed accounts, with a minimum size of $25 million.

Cadre, formed in November 2014, has attracted some $70 million in venture capital from backers including Alibaba chairman Jack Ma, Goldman, Founders Fund of San Francisco, General Catalyst Partners of Cambridge, Mass., Russian billionaire Yuri Milner and New York REIT SL Green.