PropTech Firm Cadre Sells Two Properties in Baltimore and Georgia
The company also details some of the investment numbers, including a claim that it doubled investors’ money through multifamily sales.
Proptech firm Cadre, a “technology-driven real estate investment platform” according to a press release, announced the sale of two multifamily assets—one in Baltimore and the other in Atlanta.
Cadre has a number of funds, deal-by-deal investments, and a secondary market. While the company will take investments from individuals as well as institutions, all have to be accredited investors.
“Cadre’s investments are expected to generate 20.7% and 29.2% net annualized returns to its investors, showcasing the compelling relative value multifamily investments provide, especially relative to single family pricing at record high pricing,” the firm said. “The Atlanta and Baltimore-based properties bring Cadre’s fully realized investments to 13, representing $1.19bn of enterprise value.”
Cadre says that sales of 13 properties in total delivered about 28% average net IRR to investors. “In total, the firm has returned more than $340 million in aggregate capital to investors to date.”
The Atlanta property was Hudson Ridge, 1 434-unit multifamily. The company says that it’s expected to bring 29.2% net IRR and a 2.1 times net multiple on invested capital for investors.
“Cadre recapitalized the property in 2019, and were influenced by a number of factors in the area,” the company said. When it purchased the property, Atlanta had more than 20% job growth and double the national average for population growth. Median home prices at purchase time were also 32% higher than rental of a renovated unit at Hudson Ridge. The environment and conditions drove demand. The sale happened almost five years before the expected exit.
“The sale of Versailles Apartments, a 210-unit multifamily asset in Towson, MD is anticipated to achieve 20.7% net IRR (nearly double its underwritten target) and 2.2x net multiple,” the company said. Cadre partnered with Ross Companies and GMF Capital in 2017 to make the purchase.
“Cadre identified strong demand drivers in the greater Baltimore area, such as a high concentration of medical employees and proximity to higher education institutions.8 Cadre also projected Versailles Apartments would offer a 24% discount to homeownership in the area and a lower cost option for would-be buyers.9 The firm bought the asset with the intent to execute light value-add renovations to a portion of the units and provide an attractive return on cost. Given strong performance and cap rate compression, Cadre exited the asset three years ahead of the initially targeted sale timing.”