Group Investment Insights A survey of CCIMs reveals the latest trends in syndication management.

Sept-Oct 2008
by Eugene (Gene) A. Trowbridge, CCIM, JD

Commercial real estate professionals are pooling their real estate knowledge and skills with investors’ financial resources to act on the current market’s buying opportunities. Often referred to as “sponsors” rather than syndicators, they hope to create attractive group investment packages.

Combining the resources of several investors and a sponsor produces numerous benefits for commercial real estate professionals. Investment groups may be able to acquire bigger properties than individuals alone and obtain financing more easily with a larger down payment. One investor’s credit problems may be offset by the addition of several more-creditworthy investors. Investors with substantial financial resources who lack deal-making expertise can rely on an experienced sponsor to facilitate the transaction.

While many commercial real estate professionals are capable of brokering transactions or even owning their own properties, it takes a person with unique skills to properly manage an investor group through a long-term commitment to a successful project. The sponsor’s value to the investors may rest with management skills as well as transaction capabilities.

Since 1996, the CCIM Institute has asked members repeatedly about their involvement with group investments, with subsequent surveys conducted in 1999, 2001, 2003, and 2008. The results of the survey completed earlier this year show how trends in this part of the commercial real estate industry are changing.

The current survey was conducted only among institute members, with 433 designees and candidates completing the survey. In 2003, the survey included both CCIM and Institute of Real Estate Management members and the total number of respondents was 312. Survey methodology allows the responses from only CCIM members to be considered in the comparisons. The increase in responses from CCIM members indicates a growing interest in group investing today.

Group Financial Trends

The most dramatic change reported this year is that the total amount of money expected to be raised in each group has doubled since 2003, from a median of… Read more… 

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