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.
WHY WOULD I WANT TO INVEST IN COMMERCIAL REAL ESTATE SYNDICATIONS?
Syndications 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 deliver of new office towers, or if one of the city's largest employers relocates their headquarters to a new city, leave 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.
WHAT RISK ARE ASSOCIATED WITH INVESTING IN COMMERCIAL REAL ESTATE SYNDICATIONS?
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 they may be significant enough to require a cash call for additional capital from from investors. However your ultimate risk is only your initial investment. While AGM Capital works tirelessly to mitigate risk, there is no guarantee that any investment will be free from risk.
HOW DOES AGM CAPITAL SELECT A PROPERTY TO ACQUIRE?
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 down potential - an opportunity for our seasoned leasing experts and property management tam 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.
WHAT IS THE TYPICAL DURATION OF AN AGM CAPITAL SYNDICATION INVESTMENT?
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 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 use to show up in the mail, these days distributions are made by ACH.