Why Invest in Real Estate?
Real estate has long been a cornerstone of wealth generation and preservation. However, the asset class is difficult to source, operationally intensive, and too often burdened by high fees and misalignment. This means investors of all types lack efficient access to quality opportunities.
Alongside the security of tangible asset ownership, commercial real estate has historically produced attractive returns relative to other asset classes.
Investment period: December 2000 – December 2016. Real estate data is from FTSE NAREIT US Real Estate Equity REITs and represents total return data, with full reinvestment of dividends. S&P Total Return data is from CBOE. US Bond index is from the Barclays US Aggregate Bond Index. All data is as of December 2016. Real estate return data should not be used to estimate the return of Sprout Capital investments.
We live in an after-tax world and should view our investments through a tax conscious lens. With Sprout Capital, enjoy the favorable tax characteristics of real estate ownership, including tax-shielded cash yield.
Illustrative tax scenarios assume a hypothetical pre-tax net return of 16% IRR. Tax calculations are not tax advice and assume: 39.6% marginal tax rate, 22-year blended depreciation schedule for real estate investment and no depreciation for non-real estate investment. Actual rates and depreciation scenarios may vary. Percentages rounded to the nearest whole number.
Real estate offers valuable portfolio diversification, but investing in single properties often means writing big checks. With Sprout Capital, gain access without having to make overly concentrated commitments.
Tangible Asset Ownership
As a hard asset, real estate can provide both intrinsic value and cash flow. With Sprout Capital, benefit from fractional ownership in individual properties.
Why Invest with Sprout Capital?
We are a real estate investment platform with an emphasis on differentiated sourcing, diligence enhanced by data, increased transparency, and investor-friendly terms.
We’re a team of professionals with incredible track record and working relationships with well established investment firms.
We offer direct individual investments and thus our fee load is up to 40% lower than a traditional fund construct, with no “double layer” of carried interest.
Our investors also benefit from favorable tax characteristics driven by property-level depreciation as shield against current income. We also offer Qualified Opportunity Investments to allow capital gains to be invested in accordance with QOZ tax laws.
Our data driven methodology enhances the traditional sourcing, diligence, and asset management processes.
We leverage technology to scale efficiently and lower the marginal cost of investing, allowing us to operate more efficiently than our traditional peers.
Sprout Capital invest in each transaction alongside investors. We provide detailed deal-level transparency.
We typically permit a minimum investment of $150,000 per transaction.
Distributions are typically made quarterly from available operating cash flow and are automatically deposited into investors’ bank accounts. Size and timing of distributions depend on the performance of each investment. Investors are notified of upcoming distributions and are able to track their distribution history through our platform.
Investments are typically structured as limited partnerships. For each of our investment opportunities, Sprout Capital invests alongside investors and is responsible for the construction management, stabilization, and day-to-day management of the property.
We typically pursue transactions requiring a minimum equity investment of $1-10mm. We utilize prudent leverage at the property level, in an amount and form that we believe is accretive to each opportunity.
We focus on quality over quantity. Our team invests in every transaction we pursue, which instills both patience and alignment. We are constantly reviewing opportunities but only act on the small subset we find compelling. As such, only a small number of investments may be available at any given time.
Our investment horizon varies by opportunity but a typical business plan assumes a 4-7 year hold period.
The terms of each investment may vary, and you should read the Documents before making any decision to invest.
SproutCapital.co (the “Website”) website and the offerings therein are intended only for accredited investors (for persons residing in the U.S.), and for persons residing abroad in jurisdictions where securities registration exemptions apply. Sprout LLC, along with its affiliates (including BMBLiving Inc.) and its and their directors, officers, advisors, and employees shall herein be referred to collectively as “Sprout”.
The information provided in the Website has been prepared solely for informational purposes only. The information and opinions are subject to change without notice and SproutCapital does not guarantee or warrant (either explicitly or implicitly) the accuracy or completeness of the information. Some information on the Website is in summary form for convenience of presentation and under no circumstances should any information be used or considered as an offer to sell or the invitation or solicitation of an offer to buy any product or service offered by Sprout unless expressly presented as such. No such offer or invitation or solicitation will be made prior to the delivery of definitive documentation relating to the specific securities being offered. Each investment structure may differ from the investment structure described in the Website in summary terms or as an example of a typical investment structure. Before making an investment decision with respect to any investment, potential investors are advised to carefully read the related final documentation and offering memorandum documents (the “Documents”). Further, SproutCapital does not give or offer any business advice, investment advice, tax or legal advice via this Website. Potential investors are advised to consult with their tax, legal, and financial advisors with respect to any investment.
Nothing herein shall be relied upon as a promise or representation as to past or future performance. Past performance is not indicative of future performance. The Website may contain forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “targeted,” “projected,”,“underwritten,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology. Sprout undertakes no obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. Investments such as the ones listed or described on the Website involve substantial risk, accordingly, investors should conduct their own due diligence and not rely on the financial assumptions or estimates that are displayed on the Website.