Cadre Achieves 28%+ Net IRR in Colorado Office Portfolio Sale
NEW YORK--(BUSINESS WIRE)--Jan 12, 2023--
Cadre, the technology-driven real estate investment manager, today announced the successful sale of an office portfolio in Colorado Springs, CO. Cadre’s investment in the portfolio generated a 28.1% realized net returns for its investors, highlighting the value discerning investment managers can deliver through institutional-quality deals. 1
Through the sale of the Colorado office portfolio, Cadre further adds to its track record of delivering outsized returns to its clients and solidifies its position as a premier online real estate investing platform for individuals, advisors, and institutions. In aggregate, Cadre has delivered an average net IRR of 27.6% to its investors over fourteen total deal exits. 1 The Colorado portfolio is the second office investment Cadre exited in recent months — the other, announced in July 2022, achieved a net IRR of 40.2%. The firm has returned more than $460 million in aggregate capital to investors to date. 2
While Cadre believes the overall office sector is in the midst of a meaningful transformation, office investments may eventually present compelling investment opportunities in select markets around the country. To this end, Cadre recently published its list of MVP markets highlighting the most promising markets in which select office assets could outperform the national trend over the next 24 months.
“We anticipate that in the coming months and years, we will see a larger push back towards the office, either on a full-time or hybrid basis. In today’s uncertain investment landscape, we will continue to evaluate all opportunities we cross with an attractive basis and market-level tailwinds,” said Cadre’s Managing Director and Head of Investments, Dan Rosenbloom. “In completing the lifecycle of our Colorado office portfolio, we have delivered another compelling micro opportunity in a challenging macro environment.”
Cadre’s sale of the Colorado office portfolio, comprised of 13 class-A office buildings, achieved a 28.1% net IRR and 1.8x net multiple on invested capital. Cadre secured the portfolio alongside sponsor partner Crescent Real Estate off-market at a meaningful discount to replacement cost. At the time of purchase, Cadre was attracted by the opportunity to own a diversified collection of quality assets with strong existing cash flow and upside potential through additional leasing and the ability to sell assets individually. Located one hour south of Denver, the portfolio offered properties in a tightening office market that had seen seven years with high office occupancy and limited new office space to meet the demand. 3 Cadre sold individual assets from the portfolio over a multi-year period, successfully leasing the properties and identifying attractive sale pricing relative to the remaining business plan risk.
“Our most recent portfolio sale demonstrates Cadre’s agility in uncertain times, working alongside experienced partners to generate returns for our investors,” said Ryan Williams, Cadre Founder, Executive Chairman, and Co-Chairman of Cadre’s Investment Committee. “While we remain highly selective amid uncertainty, our nimble approach to investment management allows us to act quickly when opportunities arise and manage effectively throughout the asset lifecycle.”
Cadre is a commercial real estate investment manager that invests alongside individuals and institutions on our tech-driven platform. As a fiduciary, we have a distinct responsibility to investors. Our highly disciplined process features innovations in market selection, asset management, and rigorous due diligence. We are committed to expanding access to this essential asset class, which has long contributed to legacy wealth.
Since inception, Cadre has earned investors 27.6% realized net IRR in more than $5 billion of real estate transactions across the U.S. 1 To learn more about Cadre and view the full track record and important disclosures, visit cadre.com/track-record.
Not Advice: This communication is not to be construed as investment, tax, or legal advice in relation to the relevant subject matter; investors must seek their own legal or other professional advice.
Performance Not Guaranteed: Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections are not guaranteed and may not reflect actual future performance.
Risk of Loss: All investments involve a high degree of risk and may result in partial or total loss of your investment.
Liquidity Not Guaranteed: Investments offered by Cadre are illiquid and there is never any guarantee that you will be able to exit your investments on the Secondary Market or at what price an exit (if any) will be achieved.
1 Data as of December 1, 2022. IRR calculation represents an equity-weighted average annualized internal rate of return (IRR) for all single-asset realized real estate investments of offerings firm-wide by Cadre since the formation of our Investment Committee on March 31, 2016 through to the date of calculation, after deduction of fees and expenses. Calculations assume no fee breaks or concessions were applied to any underlying offering. Equity multiple represents the investment multiple on equity, which is calculated by dividing the aggregate realized proceeds for the applicable investment after deduction of fees and expenses. Realized and updated target returns are inclusive of all of Cadre’s completed dispositions. Realized returns are subject to change following final distributions on sold assets. Calculations are generally made as of the date of the sale of the applicable asset and may include targeted proceeds that are to be distributed to the vehicles managed by Cadre (but which have not been realized by the vehicle as of the date of calculation). The calculation of net return figures for each investment pertains to single-asset investment vehicles only. The calculation of net return figures for each investment in a multi-investment fund vehicle is difficult, if not impossible, to prepare with accuracy due to the estimation of fund-wide expenses and other variable fees applicable to each investment that are necessary for such calculations. Returns reflect net performance and are not audited. Other vehicles, such as the Cadre Direct Access Fund LP and parallel vehicles, are also participants in these investments.
2 Gross Distributions to Investors refers to the sum of any income distributions, sale gains, and return of capital without deduction for any investor-specific withholding or preferred equity payments. Updated on 12/1/2022.
3 Source: CoStar, Colorado Springs Northeast & Southeast submarkets. Data as of October 9, 2018.
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CONTACT: Patrick Lovett
KEYWORD: UNITED STATES NORTH AMERICA COLORADO
INDUSTRY KEYWORD: FINANCE PROFESSIONAL SERVICES COMMERCIAL BUILDING & REAL ESTATE ASSET MANAGEMENT CONSTRUCTION & PROPERTY
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