Real estate syndications allow passive investors to participate in commercial property investments alongside experienced sponsors. Understanding syndication structures helps evaluate opportunities.
Syndication Economics
- Preferred returns: Priority distributions to LPs
- Sponsor co-invest: Skin in the game
- Promote structure: Incentive compensation for sponsors
- Fee structure: Acquisition, asset management, disposition
Investor Considerations
Evaluating syndications requires analysis of sponsor track record, deal quality, and alignment of interests. Past performance and reference checks provide valuable insight.