Syndication

A syndication is a private deal in which a sponsor raises money from a group of investors to buy a specific property, usually one too large for any of them alone: an apartment complex, a self-storage facility, an office building. The investors become limited partners in an entity the sponsor manages. Syndications have been the standard way of sharing commercial property for decades. Fractional platforms are, in most respects, syndications with smaller tickets, more investors and a website in place of a private placement memorandum sent by email.

Who can invest. Most syndications are sold under Regulation D and are open only to accredited investors, often with minimums of $25,000 to $100,000. Fractional platforms built on Regulation A+ or Regulation Crowdfunding open the same kind of asset to anyone with $100. How you find them. Syndications reach investors through the sponsor's own network. There is no marketplace and little public information. Platform listings are public pages with the numbers stated. What you get. Syndications are usually larger, more complex assets with active business plans, such as renovate and refinance. Platform listings skew toward stabilised single-family and small multi-family rentals. The former can offer higher returns with more sponsor risk. The latter is simpler to understand. How you get out. Both are illiquid, but a syndication rarely has any resale route at all. Some platforms run a secondary market.

Syndications suit accredited investors who can commit five figures per deal, want commercial-scale assets, and are comfortable evaluating a sponsor from a private placement memorandum. Fractional platforms suit anyone who wants to start smaller, spread across more properties and see everything in the open. Threeworld indexes the platform side of that market, which is the side with public listings to compare.