Real estate syndication is a method of pooling capital from multiple investors for the common goal of acquiring real estate. Investments are often syndicated in order to allow individuals to invest in properties or projects that are significantly larger than they could afford on their own. Syndications are typically lead by a sponsor who is charge of sourcing and acquiring the property, arranging financing, raising equity and managing the investment on behalf of its investors. For example, a sponsor who has secured a $10,000,000 property and $7,000,000 of debt, but only has $500,000 of equity to invest himself may syndicate the remaining $2,500,000. Syndication is broad term and the actual investment vehicle may take the form of virtually any legal entity including a limited liability company, limited partnership or Delaware Statutory Trust (DST).
