Articles

Current articles about real estate investing.

The Different Kinds of Private Capital Networks

Historically, private equity real estate investing was arranged through syndications that were only open to friends and family, or people with whom the deal sponsor had some sort of personal relationship. It’s often been referred to as “country club” equity for this reason. There was an underlying assumption that this relationship had been pre-vetted to some degree, and therefore, investors had enough confidence in the sponsor to write a check that would translate into positive returns.

The nature of private equity real estate investing changed dramatically in 2012 with the passing of the JOBS Act, a federal regulation that eased the requirements about who can invest in private equity real estate and under what conditions. Now, there are more efficient mechanisms by which investors can invest – namely, through private capital networks.

How to Identify Best in Class Sponsors

While returns have dominated the CRE conversation over the past decade of growth, recent events, namely the volatility and unprecedented economic shutdowns caused by COVID-19 have amplified many investors concerns about the other side of the coin: risk. From hotels to shopping centers to office buildings, people are paying attention to risk. The market has already experienced tremendous change and it is difficult to forecast which further changes will occur.

However, what we are currently facing is far from unprecedented. In 2008, for example, many opportunistic investors were able to capitalize on a rapidly changing real estate market. Even a brief look at our economic history, dating from the Great Depression to the present, will reveal that moments of great uncertainty are often followed by moments of great opportunity.

As a developer or sponsor, part of your job is to explain this brave new world to investors. With the right mindset—and with supporting data—you can address their concerns and help them overcome the fear of the unknown.

Creating Alpha in Real Estate Investments Through Strategic Design

Successfully cultivating investment opportunities for a private capital network involves carefully balancing the desire for strong investment returns against the risk inherent in achieving those returns. Risk is increased in times of uncertainty, and the current economic situation has investors asking how to effectively (and safely) allocate their capital. We believe that with the right sponsor partners, strong execution in the form of comprehensive underwriting, deal evaluation, and favorable investment structures, investors can find Alpha – excess return above the market - in a variety of different market conditions. This article explains how Alpha Investing is structured to source high-caliber sponsors and provide strong risk-adjusted opportunities to its members.

view looking skyward framed by downtown skyscrapers

Recession-Resilient Commercial Real Estate Investing

Commercial real estate, given its illiquid nature, is generally much slower to respond to economic shocks such as the COVID-19 crisis, however, the impact is certainly beginning to unfold as well. Whether you’re a long-time investor or someone who’s just getting started, it’s important to be prepared for recessions such as these.

Businessman standing at a railing looking out over a city skyline

What You Should Look for in a Sponsor

Real estate syndication makes it possible for sponsors to invite multiple parties to pool their resources together and invest in properties that would otherwise be either too expensive for them to buy individually or difficult to find due to lack of access.

Construction team reviewing plans

The Role of a Sponsor in CRE

Anyone interested in investing in commercial real estate should understand that they are one of several players involved in bringing a project to fruition. The most critical player, though, is the deal’s “sponsor”.