Understanding Real Estate Syndication Through a Practical Example

A real estate syndication is a process where several investors pool their resources to invest in properties and projects much larger than they could afford individually. In this process, the syndicator, or lead investor, identifies a profitable real estate opportunity, and then raises capital from other investors to acquire the property. One example of a real estate syndication involved the purchase of a medical office property. The syndicator identified a developed property with a tenant lease already signed that was being sold by the developer at a discount. The syndicator then raised $2 million from investors and took out a $2 million loan to purchase the property. The property was managed by the syndicator and every quarter, distributions were made to the investors. After four and a half years, the syndicator decided to sell the property due to favorable market conditions, resulting in significant profit for the investors. This particular syndication yielded a 15% internal rate of return (IRR) for investors, slightly exceeding the projected returns.

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Moschetti Syndication Law Group is a boutique syndication law firm, serving small and growth-bound syndicators, and well as private equity firms. We keep our firm ‘boutique’ size so we can tailor the services to each client’s unique needs without turning the firm into a faceless factory or passing unnecessary overhead expenses onto our clients. (As our client, you’ll only pay a fixed fee, so no surprises.) As for the client experience, we give real-time answers without making you book an official appointment. And we’ll work with your ambitions and overall vision to help you close the current deal and fill-in that ‘missing’ piece - whatever you need - to keep adding more syndications to your portfolio. We keep syndicators syndicating (TM).

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