Syndications are a great way to invest in commercial real estate without the substantial capital and time commitments required to own commercial property by yourself.
Syndications also give you the ability to diversify your portfolio. By investing in multiple syndications of varying asset classes, you can spread your risk. For instance, a million-dollar investment in a Class A office building might be riskier than four $250 thousand-dollar investments spread across office, retail, and industrial properties if the Class A office market takes delivery of new office towers, or if one of the city’s largest employers relocates their headquarters to a new city, leaving a spate of Class A vacancies in its wake. No investment is without risk, however, so it’s imperative that you do your due diligence before committing capital to any investment.
While participating in a syndication enables you share risk with other investors rather than carry the entire burden alone, it does not mean that your syndicated investments are without risk.
Market conditions can change and may affect short-term cashflow – or may be significant enough to require a cash call for additional capital from investors, however your ultimate risk is only your initial investment. While AGM works tirelessly to mitigate risks, there is no guarantee that any investment will be free from risk.
There are many factors we consider before determining that a property is desirable for acquisition largely based upon the asset strategy we are applying.
Core opportunities need to have a stable income history and be well-located, while value-add opportunities need to have an upside potential – an opportunity for our seasoned leasing experts and property management team to bring additional value to the bottom line. Opportunistic properties involve the most risk, as the properties face significant vacancies and/or require rehabilitation, but may offer the highest level of return if the business plan is successfully implemented.
We look for properties to hold for ten years and run financial models based on a ten-year hold. However, we consider all market factors and our asset strategy when determining the best time to divest a property.
It’s important to note that we invest alongside our investors and believe that “flipping” – the act of buying, then quickly selling a property for a higher price – usually only benefits the flipper by racking up commission fees. The long-term holds we sponsor typically generate what we refer to as “mailbox money” – regular payments that show up on a quarterly schedule with little thought or effort required by the investor. (While distributions used to show up in the mail, these days distributions are made by ACH.)
Because our syndications fall within Rule 506 of Regulation D, accreditation is a requirement to participate.
To be accredited, you must either have a net worth exceeding $1 million or have an annual income of at least $200,000 (or $300,000 joint income with a spouse) for the last two years and likelihood of continuing to receive the same (or higher) income in the current year. If you are not yet accredited and want to learn more about investor accreditation, read the US Securities and Exchange Commission’s investor bulletin.
Typically, we price our shares for as little as $100,000. You may acquire as many shares as you choose.
The typical AGM investor acquires 1-5 shares per offering, looking at investing again with the next offering.
While each investment is different and subject to market conditions, historically, our investors have received returns of 6% to 8% on annual distributions, with overall returns higher.
Past performance, however, is not an indicator of future performance, so please be sure to read all offerings thoroughly and consult your financial adviser regarding the risks involved before committing capital to any investment opportunities.
Investors receive access to two online portals for all their reporting.
The Client Portal includes files that are specific to each property; the monthly financials – including the balance sheet, budget comparison, rent roll, bank statements, etc. – are located there.
The Investor Portal houses all the investors’ personal investment information, including all the offerings they have invested in, their capital commitment, capital contributed, distributions, and all the documents pertaining to the investment. While logged in, investors may also update their account information and change certain criteria to display different data on their dashboard, getting a graphical view of their investment performance.
AGM releases distributions on a quarterly basis, depositing them to your account via ACH.
That way, your money gets to your bank even if you’re not at home to check your mail.
We work with each property’s respective tax accounting firm with a K1 target date of March 15th each year.
For expediency, K1s are no longer mailed. Instead, they are sent to you via an encrypted email, as well as loaded into your Investor Portal where you may retrieve them at any time. If you choose to add an adviser to your Investor Portal profile, your adviser may also access the K1(s) from the portal.