Cadre Real Estate Review – Commercial Real Estate Investing
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Cadre launched to democratize real estate investment and do away with steep obstacles like high minimum investments and annual income or net worth requirements.
7/10
Cost
6/10
Features
7/10
Ease of Use
7/10
Services
8/10
Commercial real estate investing can be a great way to generate passive income—and is one of the biggest reasons the housing market is so topsy-turvy these days. However, not everybody has the investment power of a major corporation or CEO. As such, individual investors often get shut out from adding a real estate portfolio to their investment portfolio unless they can qualify as accredited investors.
Several companies have recently been launched to democratize real estate investment and overcome steep obstacles like high minimum investments and annual income or net worth requirements. These crowdfunding sites make it easy for anyone to invest in commercial real estate — one of the biggest growth markets out there right now. Cadre is one crowdfunding platform you may have encountered when researching real estate deals. Learn more about Cadre investments in our review of the platform below.
Related: The Best and Worst Housing Markets
In this article
What is Cadre Real Estate?
Cadre was founded in 2014 by Ryan Williams, who worked at The Blackstone Group in its real estate private equity division. Cadre believes that by putting people first, they will be able to deliver on their mission to “give more people the opportunity to improve their financial futures.”
As a financial tech company, they accomplish this by providing individuals and businesses with access to their real estate investment platform and investing in the communities they serve. Cadre's core value is social impact, and they have won the backing and support from major financial institutions such as Goldman Sachs, Andreessen Horowitz, and the Ford Foundation.
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How does Cadre Real Estate work?
One thing to note before signing up for Cadre is that it is currently only available to accredited investors. However, they plan on expanding their offerings beyond accredited investors, so you can sign up for an investor waitlist if you’re interested in using the platform in the future but don’t quite qualify for accredited status.
Signing up for Cadre is simple to do online. Start by navigating to https://cadre.com/start/ or clicking the “Sign up” button. From there, you’ll be asked whether you’re an individual investor or a financial advisor. The process is similar whether you’re an individual investor or a financial advisor. Still, for the sake of this article, we’ll assume that you are an individual who plans on investing in real estate for yourself or your family. If you plan on using Cadre to diversify across a few different asset classes for your small business or startup, this option applies to you.
After you’ve selected an individual investor, Cadre will ask you a few questions to define whether or not you’re an accredited investor. Cadre provides a link to read the SEC's (Security Exchange Commission) full definition of what accreditation entails, but, generally speaking, you’re considered an accredited investor if you:
- Have earned an annual income of $200k+ for two consecutive years
- Have a joint household income of $300k+ for two consecutive years
- Have a net worth of $1M+ without including your primary home
Assuming you’re an accredited investor and aren’t someone just trying to join the waitlist, you will provide some personal information about yourself to continue creating your account. This includes details like your address, first and last name, and date of birth.
After providing this personal information, you’ll be asked to provide an email address and password. These will be used to log in to your account.
Once you’ve set up your account, you’ll be asked open-ended questions about how you plan to use the platform and your overall goals. For example, your investment goals may include things like diversification, opportunity zones, or finding a certain rate of return.
Another question you should be prepared to ask when you sign up for Cadre is what other kinds of investments you’ve made in the past. Cadre lets you check however many apply from a list, including directly owned rental properties, REITs, private equity funds, crowdfunding, and direct investments with operators.
You’ll also be asked about your risk-return profile. Cadre lets you choose between a conservative, moderate, or aggressive approach — all in regard to the amount of volatility you can stomach as an investor.
Cadre also asks you about your desired investment horizon. They explain that most hold periods are between 4 and 7 years, but real estate investors can sell their investments after six months using Cadre’s Secondary Market.
Finally, you’ll be asked about your net worth. If you’d prefer not to share that information at the time of registration, you are not required to.
How much does Cadre Real Estate cost?
Whether you have a Cadre Portfolio or are planning on using the platform as a deal-by-deal investor, there are a few administrative fees that you should be aware of before investing with Cadre. Some of the fees you may run into with Cadre include the following:
Administrative fee
Cadre’s FAQ section states the following about administrative and other maintenance fees: “You are not charged maintenance or activity fees for your Cadre Cash Account. Cadre Cash LLC may cover certain fees charged by the bank partner(s).”
Asset management fee
An annual management fee is charged for all Cadre users. This fee is usually 1.5% of investor equity value once an investment is funded. The fee is 0.5% a year for those with an investment of up to $1 million in assets. Investors between $1 million and $10 million pay 0.25%. Cadre automatically deducts this amount from your distributable cash flow.
Transaction fees
Cadre charges a transaction fee of 1.5% from sellers and 3.25% from buyers on the gross transaction price. This fee is included in the investor’s funding amount for each transaction.
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Cadre Real Estate features
Cadre Direct Access Fund
Cadre’s Direct Access Fund features a highly curated list of qualifying investments for its investors. On its website, Cadre shares that this fund was created “to balance risk and return through careful portfolio construction.” It focuses on institutional-quality assets between $50 and $200 million. It is designed to generate consistent annual cash flow for investors through leveraging properties with in-place tenants.
Deal-by-deal investment opportunities
If you’d rather invest on a deal-by-deal basis instead of using Cadre’s Direct Access Fund, there are several investment opportunities to look into on Cadre. These deal-by-deal investment opportunities are for investors who want total control over every aspect of their investment portfolio, allowing you to pick and choose the best investments for you.
Cadre Secondary Market
Especially with the headlines surrounding the housing market over the past few years, it’s understandable if liquidity is a big concern to you. While most real estate investments through Cadre are held for 4 to 7 years, you can sell your investment on the secondary market after six months, thanks to Cadre’s Secondary Market. Cadre introduced the secondary market in 2018, which allows investors to sell their position before a project’s disposition. The Secondary Market provides flexibility for investors looking to buy, trade, and sell earlier than when their holdings are officially due.
Cadre Cash
This feature was launched in 2020 and is a cash savings account with a 4.58% annualized reward. Balances deposited to the Cadre Cash account are eligible to be insured by the Federal Deposit Insurance Corporation up to $750,000 through partner banks set up with Cadre.
Who is Cadre Real Estate best for?
Accredited investors
Cadre is well worth considering if you’re qualified as an accredited investor and want an easy-to-use platform to invest in commercial real estate. Experts with a solid track record vet the Cadre deals, and the company does its due diligence when picking real estate properties to invest in.
Individuals interested in passive income
Thanks to the fact that Cadre picks investment properties with stable tenants, It is a good platform for anyone excited about generating passive income. Beyond its investment options, Cadre also offers the Cadre Cash Account, which offers a reward rate that is 60 times bigger than the annual average, with a 4.58% annual return.
Who shouldn’t use Cadre Real Estate?
Unaccredited investors
While unaccredited investors are eligible to sign up to get notified when Cadre allows non-accredited investors to invest in real estate, to date, you can’t use the platform as an investor without that status. You can't use the platform if your net worth or annual income doesn’t meet the accreditation requirements.
Investors without much cash on hand to invest
Just because you’re interested in investing in commercial real estate doesn’t necessarily mean that you are in a financial position to diversify your portfolio in this way. Even if you are an accredited investor, you need to have the minimum investment amount of $50,000 to open a Cadre Direct Access Fund or $25,000 to start deal-by-deal investing.
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Pros and cons
Pros
- Direct access to commercial real estate assets. Investing in commercial real estate can involve jumping through a lot of hoops, and Cadre streamlines the process, so that you can focus on diversifying your portfolio rather than meeting various eligibility requirements.
- Curated by industry veterans. Just because you’re an accredited investor doesn’t mean that you want to spend the time and energy to vet investment properties yourself. Cadre provides easy access to investment options curated by industry veterans, so you can have peace of mind that your allocation will result in distributions you can rely on.
- Transparent reporting. Want to know where your money is being invested? Cadre shows a variety of details in reports about your portfolio, including the asset type, geography, net asset value, distributions, current trade value, and returns.
Cons
- No guarantees. While the real estate sector is currently booming, there’s no guarantee that past performance will indicate future performance—even with expert vetting. Keep this in mind and only invest money you can afford to lose.
- Not a public exchange. Cadre goes out of its way to share that the Cadre Secondary Market is not a stock exchange or public securities exchange, which means liquidity isn’t guaranteed. While it’s not likely, they do state that there’s no guarantee that this feature will continue to be made available to investors.
- Must be accredited to invest. There are other crowdfunding platforms out there to help you invest in commercial real estate even without being accredited. While it is a stated goal for the platform, Cadre isn’t one of them at this time.
Cadre Real Estate competitors
Platform | Eligibility | Minimum Investment | Annual Fees |
Cadre | Accredited only | $25,000 | 1.5% |
Fundrise | All investors | $10 | 1.5% |
Streitwise | All investors | 500 shares | 2% |
Cadre
Cadre’s fees are about average compared to Fundrise and Streitwise; however, the fact that it is only available for accredited investors means that many people may not qualify to open an account. This is both a good thing and a bad thing. For accredited investors, you’re likely to have access to higher-quality investment opportunities using Cadre compared to Fundrise or Streitwise. However, this makes it less appealing to the average investor.
Fundrise
For investors who aren’t accredited, Fundrise is the most accessible option. This is because it only has a $10 minimum investment requirement. While this makes it attractive for general investors who don’t meet Cadre's net worth requirements, the fact that it is open to all does dilute its offerings a bit.
Streitwise
First thing first: Streitwise has a clever name, hiding the word REIT in the middle of its name. Beyond that, Streitwise is worth considering if you have a bit more income to invest, are interested in commercial real estate, and want an alternative to Fundrise. While its annual fees are higher, which is a bit of a drawback, they aren’t much higher than Cadre’s offerings.
FAQs
What tax documents will I receive for investing in Cadre?
At the end of each year, Cadre will share an aggregated tax reporting package with your K-1s for tax filing purposes.
How long does the verification process take?
As long as no additional documents are required in order to prove your accredited investor status, verification typically takes three business days to complete.
Do I have to pay state tax on investments in opportunity zones?
It’s best to consult your existing tax professional or accountant in order to learn more about local guidelines surrounding state taxes owed. That being said, Cadre’s website does share the following information from one practitioner about this topic: “Investors in states that do conform with the federal Opportunity Zones provisions may receive state tax incentives similar to those available at the federal level.”
Can anyone invest in the Cadre Direct Access Fund?
No, you must qualify as an accredited investor to invest in the Cadre Direct Access Fund.
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The bottom line
If you qualify, cadre is a much simpler way to start investing in commercial real estate. Not everyone will be able to claim accredited investor status, which means that for as long as Cadre only caters to this group, its usefulness is not broad. For many readers, the dream of having a $1M net worth is why they’re here in the first place!
Even with its requirement that investors are accredited, Cadre does offer reasonable fees and access to high-quality investments. Its focus on quality over quantity and high minimum investment requirements mean that you can have peace of mind in what you do invest in.
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Writer
Brent Ervin-Eickhoff is a Chicago-based writer, stage director, and filmmaker with a background in digital marketing and content creation. In addition to Joy Wallet, Brent has written for Complex, Volkswagen, HowlRound, Picture this Post, and Third Coast Review, among others. He currently serves as the Associate Director of Marketing for Content Creation at Court Theatre at the University of Chicago. Brent graduated from Ball State University with Academic Honors in Writing.
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