Some Thoughts on Private Placement Syndication

Some Thoughts on Private Placement Syndication
By: Nicholas A. Dunlap, CPM

Participating in a private placement syndication or partnership is an excellent way for investors to align themselves with likeminded individuals looking for similar returns or gains. What’s more, the partnership’s sponsor or General Partner will in most cases have a unique insight as to how the property will operate most successfully. Typically investors will be presented with a prospectus and then a capital call will take place. At this point in time, the syndication’s sponsor identifies the number of spaces available and the minimum/maximum dollar amount of the buy in required. A strategy will be discussed, a management plan will be presented and ultimately, the acquisition will be made. Often times the sponsor will determine that a number of improvements should be made to the property before proceeds can be shared with investors. Thus, the improvements are financed by the Operating Income of the asset, not requiring additional out-of-pocket contributions from ownership unless otherwise agreed upon.