As Coins2Day was first to report yesterday, Yieldstreet is acquiring Cadre, a real estate investment platform with a mission to democratize access to investing, particularly in commercial real estate. Cadre’s founder and chief executive, Ryan Williams, will remain at the helm as the company operates under the Yieldstreet umbrella—while leading a new division focused on broadening access to the institutional audience as Yieldstreet’s global head of institutional partnerships & clients.
The companies declined to release the purchase price, but the two have a collective investment value of over $9.7 billion and investors that have allocated $5.3 billion on their platforms—notching $3.1 billion in returns to date, they say. While the transaction is subject to regulatory review, their goal is to become a leader across the real estate and alternatives investment industry. Cadre has raised $133 million from Thrive Capital, Andreessen Horowitz, Khosla Ventures and others; its latest valuation was $800 million, according to Forbes. (The Information reported on a possible deal in the works in August of this year).
Williams previously told Coins2Day that his idea to launch Cadre came after visiting his best friend in a predominantly Black part of Atlanta. In an interview today, Williams told me that a year after the housing crash, almost every other home lining the streets were boarded up, or being boarded up. He and some classmates along with others raised money in a syndication format to buy single-family homes and rent them out, particularly to the people whose homes had been foreclosed upon. Some success stories even included those people buying their homes back, he said.
That was all before Cadre launched in 2014, making waves as a startup that allowed individuals to invest in commercial real estate for as little as $25,000. Five years later, Cadre hit a milestone, returning $100 million to its investors after selling two apartment complexes in the Chicago and Atlanta suburbs, as Coins2Day first reported at the time. Now, the company has slightly more than $4.5 billion in total asset value on its platforms, Williams said—and with Cadre’s partnership with Yieldstreet, an alternative investment platform that launched just a year after Cadre, he hopes they can build what will be the “largest digital alternative asset manager in the industry.”
Yieldstreet’s founder and chief executive, Michael Weisz, shared Williams’ excitement and optimism on our call. “What this transaction does for the industry is clearly define a market leader by a factor of five,” Weisz said.
Williams and Weisz have known each other for years, sharing the same visions that alternative investments need to be a bigger part of individual investors’ portfolios. Cadre did things differently, focusing on real estate, but Williams has always wanted to move beyond the sector.
“That takes time and that takes resources—capital and expertise,” Williams said. “I recognized while we were in the midst of closing a fundraise, that we wanted to not just grow but grow exponentially, and we were going to need to find a partner who offered us diversified investments that we could distribute to our clients in a way that would ensure we were able to navigate any macro or market environment, and I think that’s one of the things Yieldstreet has done incredibly well.”
They’d had previous discussions about combining forces, but the time seemed to be right, so they connected earlier this year to make it happen. For Weisz, and Yieldstreet, it was an obvious decision because there’s an alignment between both companies’ mission and vision—which he said is typically the hardest part when it comes to bringing two teams together.
“That’s the motivation, to extend our leadership, to set us up for a successful IPO, to build the best business, to serve our customers with the best experience with the best investment product,” Weisz said.
No question it’s been a tough year for real estate. “We’ve been in defense mode,” Williams said, “but we’ve been very proactive on asset management. We’ve made sure that across our portfolio, we had fixed-rate debt in place, we put caps on all of our floating-rate debt, and we’ve been focused on over-communicating with investors about the status of their portfolios.”
Cadre’s portfolio has held up well, he added, because it’s weighted toward multifamily. In the next year, he sees opportunity in mid-cap real estate (properties with $15 to $50 million of equity in total value, in the company’s view). That’s especially true for multifamily and industrial properties with debt coming due, Williams said, to distressed regional banks that won’t allow owners to refinance. This deal with Yieldstreet will allow Cadre to create a new fund that will “capitalize on these dislocations and acquire multifamily and industrial assets that these regional banks are not going to extend loans around, that sellers will be forced to sell,” Williams explained.
Weisz echoed Williams on the challenges surrounding commercial real estate over the past year, while stressing that it’s a priority to focus on real estate moving forward.
“A lot of us in the market have been waiting for more opportunities to bubble up,” Weisz said. “We haven’t yet seen a flurry of opportunity come, true distress and true foreclosures, or assets that are really changing hands at prices that seem to be exciting—but we expect that it will come soon.”
See you Monday,
Alena Botros
Twitter: @alenabotros
Email: [email protected]
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Joe Abrams curated the deals section of today’s newsletter.
VENTURE DEALS
- mylight150, a Lyon, France-based provider of solar panels and other clean energy solutions, raised €100 million ($108.9 million) in funding. Eiffel Investment Group, Azora Capital, and Andera Partners led the round and were joined by Elevation Capital Partners.
- Together AI, a San Francisco-based developer of generative AI and AI model development infrastructure, raised $102.5 million in Series A funding. Kleiner Perkins led the round and was joined by NVIDIA, Emergence Capital, Lux Capital, and others.
- Arrivo Bioventures, a Morrisville, N.C.-based drug developer, raised $45 million in Series B funding. Orlando Ventures led the round and was joined by Solas BioVentures Emerging Healthcare Fund, Rex Health Ventures, and others.
- Kahuna Workforce Solutions, a Houston, Texas-based skills management software for operations, learning, and human resources departments, raised $21 million in Series B funding from Resolve Growth Partners.
- Modo Energy, a London, U.K.-based data analytics platform for energy storage systems, raised $15 million in Series A funding. MMC Ventures led the round and was joined by Triple Point Ventures, Fred Olsen Limited, and Catalyst Capital.
- Valid8 Financial, a Boulder, Colo. And Seattle, Wash.-based provider of technology designed to trace the flow of financial funds and verify financial data, among other services, raised $8.5 million in Series A funding. Silverton Partners led the round and was joined by Touchdown Ventures, First Trust, CPA.com, and Capital Midwest.
PRIVATE EQUITY
- Eagle Tree Capital acquired Summit Hill Foods, a Rome, Ga.-based owner of the Better Than Bouillon®, The Original Louisiana Brand Hot Sauce™ and Better Than Gravy® food brands. Financial terms were not disclosed.
- May River Capital acquired RLE Technologies, a Fort Collins, Colo.-based provider of facility environment monitoring, fluid leak detection, and airflow management products. Financial terms were not disclosed.
- New State Capital Partners acquired Agility Recovery Services, an Atlanta, Ga.-based company that offers temporary office space, data backup and recovery, and other services to businesses affected by natural disasters or operational threats. Financial terms were not disclosed.
- Roadsafe Traffic Systems, a portfolio company of Investcorp and Trilantic North America, acquired Dobie Supply, an Austin, Texas-based supplier of traffic control devices and manufacturer of roadway and commercial signage. Financial terms were not disclosed.
OTHER
- NomuPay acquired Total Processing, a Manchester, U.K.-based payment platform for merchants. Financial terms were not disclosed.
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