According to FINRA Rule 2310, a “sponsor” is defined as a person or legal entity that provides management services for a direct participation program, acting as a general partner or issuer of the offering. The sponsor takes charge of sourcing the real estate, structuring the offering, arranging financing, syndicating the offering, managing the asset, servicing the debt, distributing cash flow, providing reports and communications to investors, and facilitating the eventual sale of the property.
Most sponsors have been owners and managers of commercial real estate for many years before entering the industry. Some larger sponsors are subsidiaries or branches of large real estate firms that continue to manage institutional real estate outside of the industry. Several sponsors even manage public REITs with significant property values. As a result, sponsors vary greatly in size and financial strength.
The Sponsor takes on the pivotal role of identifying and choosing the ideal property or properties for acquisition, assuming full responsibility for all pre-acquisition activities. This includes conducting thorough research, due diligence, and market analysis to ensure the selection aligns with the investment objectives. The Sponsor diligently manages every aspect of the process, from negotiating deals and securing financing to coordinating legal and logistical requirements. By overseeing these pre-acquisition activities, the Sponsor ensures that the property or properties chosen for the DST meet the desired criteria and have the potential for successful investment.
During the sponsor’s due diligence process, various procedures are carried out to thoroughly review a property as a potential acquisition. This includes examining appraisals, environmental studies, condition reports, lease agreements, population demographics, traffic counts, historical occupancy reports, economic vacancy records, rent rolls, and lease termination clauses. The sponsor also conducts site visits and interviews with tenants. Given the activities and expenses involved, sponsors work hard to earn their acquisition fee.
The sponsor also needs to maintain adequate staffing to source properties, provide investor services, and handle accounting.
We prioritize working with sponsors who have a holistic view of their properties. This
means that our partners take a comprehensive approach to property management and
investment strategies, considering various factors that can impact the success of the
investment.
Our Sponsors look beyond the immediate financial returns and understand the importance of factors such as location, market trends, tenant demographics, and
property condition.
The following are examples of just a few of the sponsors we work with. For a full list
and current specific offerings, please register for our investment Deal Center.
Capital Square 1031 is a national real estate investment and management company. The firm sponsors institutional-quality real estate exchange programs that qualify for tax deferral under Section 1031 of the Internal Revenue Code. Capital Square uses the Delaware Statutory Trust (DST) structure to make quality real estate available to a larger number of investors. According to Capital Square’s website, they provide a range of services, including due diligence, acquisition, loan sourcing, property management / asset management, and disposition, for a growing number of high-net-worth investors, private equity firms, family offices, and institutional investors. As of March 17, 2022, the firm has completed more than $4.2B in transaction volume. Cornerstone Real Estate Investment Services has no affiliation or relationship with Capital Square.
According to Carter’s website, key personnel of the sponsor have over 225 years of combined experience in the commercial real estate industry. This proven, diverse team of world-class, real estate experts, entrepreneurs and fund managers have completed $86 billion of total commercial real estate acquisitions, financing, development, and capital raising. Members of the sponsor’s leadership team have extensive backgrounds in forming and operating investment and real estate investment companies in the multifamily, office, industrial, retail, healthcare, and specialty sectors. Cornerstone Real Estate Investment Services is not affiliated with Carter.
According to the website, Bluerock Value Exchange (BVEX), a subsidiary of Bluerock Real Estate, is a national sponsor of syndicated 1031-exchange offerings for over 18+ years with a focus on Premier Exchange Properties™ that seek to deliver stable cash flows and potential for value creation. Bluerock has structured 1031 exchanges on over $1.8 billion in total property value and over 10 million square feet of property. With capacity across nearly all real estate sectors and the ability to customize transactions for individual investors, BVEX is available to create programs to accommodate a wide range of tax requirements. Cornerstone Real Estate Investment Services is not affiliated with Bluerock.
Cantor is a premier global financial services firm. Founded in 1945, their diversified organization spans the globe with more than 12,500 employees in more than 150 offices. Cantor is among the largest real estate brokerage and financing companies in the world, a leading inter-dealer broker and a renowned investment bank. Over the past decade, Cantor has invested more than $2 billion in its commercial real estate business infrastructure. It’s comprehensive real estate expertise and capabilities are the result of a powerful alignment of vertically integrated affiliates providing unique insight into every phase of a real estate transaction. Cantor’s expansive real estate platform offers broad access to critical market data and research, enhanced ability for diligence and underwriting, and superior deal flow. With their global resources, capital markets knowledge, strategic investments and deep real estate infrastructure, they deliver institutional-quality alternative investments to investors. Cornerstone Real Estate Investment Services has no affiliation or relationship with Cantor Fitzgerald.
ExchangeRight and its affiliates’ vertically integrated platform features more than $5.6 billion in assets under management that are diversified across over 1,200 properties and 22 million square feet throughout 47 states. ExchangeRight pursues its passion to empower people to be secure, free, and generous by providing REIT, fund, and 1031 DST portfolios that target secure capital, stable income, and strategic exits. The company strategically syndicates net-leased portfolios of assets backed primarily by investment-grade corporations that successfully operate in the necessity-based retail and healthcare industries, as well as diversified value-add portfolios of inline and outparcel retail properties shadow-anchored by strong-performing grocery tenants. Past performance is not indicative of future results. Please visit www.exchangeright.com for more information. Cornerstone Real Estate Investment Services has no affiliation or relationship with Exchange Right.
Net Lease Capital is a leading investment and advisory firm in the single tenant net lease arena. The majority of our team has been with the firm for over 10 years. According to Net Lease Capital’s website, they have closed over $14 billion in net lease transactions, and have earned recognition for their expertise in strategic net lease investment and capital gains tax solutions using net lease property. Net Lease Capital is a principal that has acquired over $5.7 billion of single-tenant, investment-grade property. Cornerstone Real Estate Investment Services has no affiliation or relationship with Net Lease Capital Advisors.
According to NexPoint’s website, NexPoint is a leading alternative investment advisor. NexPoint manages a suite of products that provide access to differentiated investment opportunities. The NexPoint product suite covers a range of vehicles, including listed REITs, real estate private placements, 1031 exchanges, closed-end funds, a business development company (BDC), and interval funds. NexPoint is part of a multibillion-dollar investment platform that serves both retail and institutional investors worldwide. While NexPoint’s focus areas include real estate and alternative credit strategies, its products draw on expertise and capabilities from across the platform, which spans a range of asset classes and investment strategies. NexPoint has conducted $15 billion in gross real estate transactions and has $12.1 billion in assets under management. Cornerstone Real Estate Investment Services is not affiliated with NexPoint.
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All investing involves risk of loss of some or all principal invested. Past performance is not indicative of future performance. There can be no guarantee that any investment or strategy will achieve its stated objectives. Speak to your tax and/or financial professional prior to investing. Securities and advisory services through Emerson Equity LLC, member FINRA and SIPC and a registered investment adviser. Emerson is not affiliated with any other entity identified herein.
There is no guarantee that any strategy will be successful or achieve investment objectives; Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments; Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities; Potential for foreclosure – All fnanced real estate investments have potential for foreclosure; Illiquidity –These assets are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments;Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions; Impact of fees/expenses – Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefts. Stated tax benefts – Any stated tax benefts are not guaranteed and are subject to changes in the tax code. Speak to your tax professional prior to investing.
Investing in opportunity zones is speculative. Opportunity zones are newly formed entities with no operating history. There is no assurance of investment return, property appreciation, or profits. The ability to resell the fund’s underlying investment properties or businesses is not guaranteed. Investing in opportunity zone funds may involve a higher level of risk than investing in other established real estate offerings. Long-term investment. Opportunity zone funds have illiquid underlying investments that may not be easy to sell and the return of capital and realization of gains, if any, from an investment will generally occur only upon the partial or complete disposition or refinancing of such investments. Limited secondary market for redemption. Although secondary markets may provide a liquidity option in limited circumstances, the amount you will receive typically is discounted to current valuations. Difficult valuation assessment. The portfolio holdings in opportunity zone funds may be difficult to value because financial markets or exchanges do not usually quote or trade the holdings. As such, market prices for most of a fund’s holdings will not be readily available. Capital call default consequences. Meeting capital calls to provide managers with the pledged capital is a contractual obligation of each investor. Failure to meet this requirement in a timely manner could elicit significant adverse consequences, including, without limitation, the forfeiture of your interest in the fund. Leverage. Opportunity zone funds may use leverage in connection with certain investments or participate in investments with highly leveraged capital structures. Leverage involves a high degree of financial risk and may increase the exposure of such investments to factors such as rising interest rates, downturns in the economy or deterioration in the condition of the assets underlying such investments. Unregistered investment. As with other unregistered investments, the regulatory protections of the Investment Company Act of 1940 are not available with unregistered securities. Regulation. It is possible, due to tax, regulatory, or investment decisions, that a fund, or its investors, are unable realize any tax benefits. You should evaluate the merits of the underlying investment and not solely invest in an opportunity zone fund for any potential tax advantage.
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