What Are the Advantages of Commingled Real Estate Funds?
Not only does a real estate fund demonstrate that capital is readily available and there is sufficient equity to close a deal, but this capital backing allows investors to move more quickly on a deal. Matt Ertman, Allen Matkins partner, recently chatted with Connect Media about the advantages of forming a commingled real estate investment fund, especially now.
Connect Media: For real estate investors in the current economic climate, what are the advantages of forming a commingled real estate investment fund versus a deal-by-deal approach?
Ertman: In a commingled fund, you have the ability to act more quickly. That’s obviously a general answer because some people have an investment partner that they do deals with and with whom they have close relationships, and dedicated capital that they can call on at any time.
And perhaps there aren’t a lot of parameters around the opportunity and the project requirements. This gives you the opportunity to be a responsive buyer a seller knows can close quickly. Commingled funds take away the uncertainty of an acquisition that may not close. Especially in the current environment, market prices may be fluctuating greatly or sellers may have a need to sell quickly. Certainty of closing is really important, so commingled funds can make you a very attractive buyer.
Lisa Brown has decades of experience in corporate communications and marketing management with organizations including Coldwell Banker Residential, Grubb & Ellis, Marcus & Millichap, NAIOP, SIOR and ALM.
In those positions, she worked in conjunction with chief executive officers and chief marketing officers to create corporate messaging, cohesive branding standards, strategic marketing plans and thought pieces. Brown is a frequent speaker at industry events and an editing adjunct professor for an online course. She has a master’s degree in mass communications from San Jose State University.