What Is Real Estate Syndication?
How sponsors and investors partner to acquire and operate institutional‑quality properties.
Definition and Roles
A real estate syndication is a partnership structure that pools capital from multiple investors to buy and operate property. The sponsor (general partner) sources the deal, underwrites, arranges financing, manages execution, and communicates performance, while limited partners (investors) provide most of the equity capital.
Structure and Documents
Syndications are typically formed as LLCs or LPs. Investors review a Private Placement Memorandum (PPM), Operating Agreement, and Subscription Documents that explain risks, fees, and the distribution waterfall.
Benefits and Considerations
Benefits include access to larger assets, sponsor expertise, diversification, and professional reporting. Considerations include illiquidity, leverage, market risk, and execution risk. Investors should evaluate sponsor track record and alignment carefully.