Cadre Successfully Delivers 40%+ Net Returns Through Sale of Two Assets; Doubles Investor Money in Less than Two Years ¹

Recent Sales of Marquee Assets in Cadre Direct Access Fund Highlight Benefit of Private Real Estate Amid Market Volatility

NEW YORK, July 21, 2022 /PRNewswire/ -- Cadre, the leading technology-driven real estate investment platform, today announced the successful sale of two assets in Phoenix, AZ and the greater Washington, DC area. These are Cadre's first sales in the Cadre Direct Access Fund which was launched in 2020, and represent Cadre's tenth and eleventh successful sales since Cadre's founding. Amid the public markets whipsaw and inflationary environment, Cadre's two recent private real estate sales are expected to generate 67.3% and 40.2% net returns to its customers, further demonstrating Cadre's market-leading position and the value of private real estate ownership in building a well-balanced investment portfolio.

Private real estate is often recognized for historically high risk-adjusted returns, especially during volatile periods in the stock market.² During recent market drawdowns like the Great Recession and Dot-com bubble, stocks –- represented by the S&P 500 index — lost an average of ~36% in value.³ Meanwhile, private real estate delivered over those periods an average of approximately 31.86% returns, as represented by the NAREIT index.⁴  According to a Cadre study on asset allocation, adding real estate to a traditional stock and bond portfolio can help reduce volatility by roughly 15%, largely driven by the low correlation of private real estate to public markets and the asset class's attractive risk/return profile.

Cadre now has delivered an average net IRR of ~28% to its clients following eleven total deal exits, including two property sales earlier this year.⁵ In total, the firm has returned more than $340 million in aggregate capital  to investors to date.⁶ Cadre has now eclipsed more than $5 billion in total transaction volume and continues to advance its efforts to improve more individuals' financial futures by generating outsized returns from institutional-quality investments.

These two sales validate Cadre's execution of the Cadre Direct Access Fund investment strategy, a fund that enabled institutions and individuals to invest alongside each other. The sale of 10 West Commerce, a 860,000-square-foot industrial development in Phoenix, AZ is expected to achieve an 67.3% net IRR and 2.1x net multiple. Partnering with Creation Equity, Cadre purchased the property in 2021 amid massive growth and rising industrial value in the Phoenix area. Phoenix's low cost and high quality of living has driven population growth that is nearly triple the national pace, and jobs growth that is more than double the national average.⁷ Within the industrial sector, Phoenix offers a ~40% discount to industrial rents in Los Angeles and Orange County, California.⁸ Phoenix's Southwest industrial submarket is home to major blue chip industrial tenants drawn to the Foreign Trade Zone status, deep labor pool, convenient access to major interstates, and proximity to major ports in California.

Separately, Cadre's sale of Key West Crossings, a 284,000-square-foot life science office asset in Rockville, MD is expected to achieve an ~40.2% net IRR and 1.8x net multiple on invested capital for investors. In partnership with Beckham Gumbin Ventures, Cadre purchased the property in 2020, in part due to its position at the heart of the I-270 Corridor, a thriving life science cluster also known in the industry as DNA Alley that serves as home to leading research institutions such as the NIH, Department of Health, and National Cancer Institute. Cadre purchased the property at a 45% discount to replacement cost and set forward a business plan to complete the space's conversion needed to properly support life science tenants.

"Through our most recent successful property sales, we have contributed to positive financial outcomes for all of our investors. We are proud to have doubled our investor's money in less than two years and provided outsized returns at a time of extreme market volatility. As our platform reaches even more individuals, we aim to continue leveling the playing field by giving individuals the same access to quality, compelling real estate deals as institutions," said Ryan Williams, Cadre Founder, Executive Chairman, and Co-Chairman of Cadre's Investment Committee. "Now more than ever, we are reassured in our belief that private real estate is a valuable addition to investment portfolios, especially those looking to arm themselves against the risks of a volatile environment today and in future years. By identifying strong assets within high-growth markets, we have developed a consistent formula for uncovering opportunity – even when public markets face headwinds."

About Cadre

Cadre is a groundbreaking technology-driven commercial real estate investment platform that offers both institutional and individual investors the opportunity to access expertly curated real estate assets with lower minimums, low fees, and unprecedented potential for liquidity. Via its data-driven and transparent approach, Cadre opens participation in a historically opaque and illiquid asset class.

Along with its traditional investment offerings, Cadre also provides investors with the ability to pursue highly vetted commercial real estate opportunities and the opportunity to seek liquidity through its proprietary secondary market, a unique offering within the industry.

Since Cadre's founding, Cadre has closed more than $5 billion in real estate transactions across 25 U.S. markets. Cadre has exited eleven investments with an 27.7%+ targeted realized average net IRR and in total has returned approximately $340 million of capital to Cadre investors to date. For additional information, please visit www.cadre.com.^{5, 6}

Disclaimer
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 Refers to equity weighted targeted realized net equity multiple that would be generated by Key West Crossings and 10 West Commerce. See footnote 5 below for additional information regarding the calculation of net equity multiple.

² Source: Bloomberg and NCREIF. Historical refers to a 20-year time period, beginning December 31, 1999 and ending December 31, 2019. Commercial real estate is represented by the NCREIF Open-End Diversified Core (ODCE) Index, an equal weighted, time weighted index representing a blended portfolio of institutional-quality real estate funds reported net of management and advisory fees. The S&P 500 Index represents an unmanaged index of the 500 largest stocks (in terms of market value), weighted by market capitalization and considered representative of the broader stock market. Indices are unmanaged and investors cannot invest directly in an index. Unless otherwise noted, performance of indices does not account for any fees, commissions or other expenses that would be incurred.

³ Source: YCharts, S&P 500 Index Returns for the time periods 1/1/2001 - 3/31/2003 and 10/1/2007 - 3/31/2009.

⁴ Source: NAREIT, Private Real Estate Index Returns for the time periods 1/1/2001 - 3/31/2003 and 10/1/2007 - 3/31/2009.

⁵  IRR calculation represents an equity-weighted average annualized internal rate of return (IRR) for realized real estate investments of offerings by Cadre since the formation of our Investment Committee through to the date of calculation, after deduction of fees and expenses. 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. For recently realized investments, an estimate of proceeds to vehicles managed by Cadre may be used. The use of a different methodology may result in a materially different return metric. As of 6/15/2022, our realized investments consist of: (1) Astoria Portfolio, a 143-unit multifamily asset in Queens, NYC, acquired January 2015, with a realized net IRR of 16.2% and a net equity multiple of 1.4x, (2) Sugarloaf trails, a 268-unit multifamily asset in Suburban Atlanta, acquired April 2017, realized net IRR of 27.4% and net equity multiple of 1.8x, (3) Skyridge Apartments, a 364-unit multifamily asset in suburban Chicago, acquired November 2016, with a realized net IRR of 15.0% and net equity multiple of 1.4x, (4) Avida, 421-unit multifamily project, located in Salt Lake City UT, acquired August 2017, realized net IRR of 16.8% and realized net equity multiple of 1.4x, (5) Crestleigh Apartments, a 389-unit multifamily asset in Laurel, MD, acquired September 2016, with an updated target net IRR of 10.2% and a net equity multiple of 1.6x, (6) Trails Portfolio, two multifamily properties totaling 810 units in Houston, TX, acquired January 2018, with an updated target net IRR of 22.4% and a net equity multiple of 2.0x, (7) Solis at Winter Park, a 596-unit multifamily asset Winter Park, FL, acquired, September 2018, with an updated target net IRR of 18.1% and a net equity multiple of 1.7x, (8) Lodge at Copperfield, a 330-unit multifamily asset in Houston, TX, acquired November 2018, with a updated target net IRR of 21.8% and a net equity multiple of 1.9x, (9) Lincoln Place, a multifamily asset in Sacramento, CA, acquired July 2018, with a updated target net IRR of 22.0% and a net equity multiple of 1.9x, (10) Key West Crossings, a life science asset, acquired August 2020 with an updated target net IRR of 40.2% and a net equity multiple of 1.8x and (11) 10 West Commerce, an industrial asset, acquired February 2021 with an updated target net IRR of 67.3% and a net equity multiple of 21.3x.

⁶  Aggregate capital to investors refers to the sum of any income distributions, sales gains, and return of capital without deduction for any investor specific withholding or contribution interest.

⁷ Source: CBRE, US Industrial Report (Q3 2020), as of December 2020.

⁸  Source: Cushman & Wakefield, CBRE, Green Street, as of December 2020.

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SOURCE Cadre

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