Cadre CEO on launch of 'cash' product

Cadre Co-Founder and CEO Ryan Williams joins the On the Move panel to discuss the launch of 'Cadre Cash'.

Video Transcript

ADAM SHAPIRO: Bringing back to the program someone we've met before, Ryan Williams, Cadre co-founder and CEO, along with Julia La Roche, because there's something new that Cadre is launching today. That's the launch of Cadre Cash.

Now, a lot of us think of the platform you've created as a way for those of us at the smaller income levels to get in on big real estate deals. Tell me how Cadre Cash plays into all this.

RYAN WILLIAMS: Yeah, definitely. We're incredibly excited to launch it. And it's really the next product in our suite of investment offerings aimed at giving individuals more access to financial prosperity. This is, at this moment in time, an incredibly uncertain, volatile economy, which makes it really challenging to invest. And what's even more challenging is this macro environment, it's marked by investments with low yield, low growth, high volatility.

So Cadre Cash is our answer to the challenges of this market. It's a product that provides investors with a 3% cash reward on cash held in their own Cadre Cash savings account through our platform. They access and are able to earn this outsized reward when they invest in our latest real estate portfolio offering on our platform.

And what this practically means is investors can earn a cash reward while waiting to have their cash invested in defensive, growth-oriented real estate that serves as a great hedge to the volatility in the equity markets. The 3% reward that I mentioned is 60 times more than the national average APY. It's four times more than the leading savings accounts.

And I think what's most exciting is that Cadre is on the offense, on the offensive now. We're focused on investing again. And so in addition to this outsized cash reward, investors now can also get access to a carefully curated commercial real estate portfolio that gives them the opportunity to participate in the recovery and have a more defensive way to retain and grow their principal.

JULIA LA ROCHE: Ryan, it's Julia La Roche here. And you just touched upon a number of things going on, including a lot of the banks have been slashing the APYs, given just the historically low interest rate environment we're in.

Now, to qualify for this, you have to be a qualified investor. I want to hear how someone qualifies for it. I believe it's at least 50K to invest on Cadre. I'm curious how your investor base is doing in this environment. I think you have a really interesting pulse as to what that investors-- what they're going through at this time.

RYAN WILLIAMS: Definitely, yeah. I mean, as you mentioned, Julia, it's tough, and it's challenging today to find yield without taking a lot of risk. You can see it in the stock market today. You can see it in other alternative investments.

So what we're hearing from our investors is that many of them are looking for a safe way to grow their capital, a safe way to achieve greater yield, a safe way to be able to have diversification. And a lot of them have been a bit shellshocked coming out of COVID. But now they're beginning to look forward. They're seeing there's a light at the end of the tunnel. And the stock market, the equity markets today don't provide a clear path for many of those folks.

And so we've actually seen an all-time high in new engagement with our investors, new demand. We've announced we're actively investing with the launch of Cadre Cash, building a portfolio that really is focused on maximized, risk-adjusted returns.

So what we're focused on with this portfolio, multifamily, which has proven through market cycles to be resilient. It's where we built our track record. We've delivered more than an 18% net IRR across four multi-family deals we've sold over the last few years. And then also industrial.

So there's been a ton of tailwinds, just given the acceleration of e-commerce and companies focused more on logistics and the digitization of retail. And so that's really the second asset class alongside a select group of office, suburban office, life sciences, and then very selected in 2021 in hotel.

But what we're doing is curating these portfolios. We're focusing on the winners. Of course, there will be losers, so to speak, in terms of headwinds. But giving investors access at lower entry points to a portfolio of 10 to 15 of these properties at a point in time when they need stability, they need yield more than ever.

So we're optimistic and excited about the opportunity to meet these growing needs in a time of fewer and fewer compelling options.

JULIA LA ROCHE: Yeah, no, and I hear you. You were saying that you were just going-- you're going back on offense to reference that $3 billion portfolio and some of the areas that are interesting to you. Could you just kind of give our viewers a sense of the real estate market? Walk us through that. You mentioned losers out there that you want to avoid. Walk us through what the real estate market looks like, what's kind of being overblown, and what are the things that aren't getting enough attention that are really more risky.

RYAN WILLIAMS: Definitely. Yeah, you know, real estate has historically been one of the top asset classes for wealth creation. But it's also been an asset class where, if you're not investing alongside the right partners or platforms, or in the right asset classes, you can also lose a ton of money.

So what we've done is we've said, we want to look at investing through two dimensions-- one, asset class, two, geography. Because I think it's important to really couple those two together.

From an asset class perspective, we like residential and multifamily. People are always going to need somewhere to live. Interest rates are at an all-time low so financing is actually very accretive in many real estate investment opportunities. And it's a relatively defensive asset class. We've seen higher renewals in our portfolio where more than 95% of our real estate assets are occupied right now, which is actually greater than what we thought. So that's going to be the foundation. We like residential real estate.

Second asset class is industrial. A lot of people talk about it. But there is a ton of tailwinds in that space.

And then the third asset class I'd highlight is office, but a suburban office bend, or with a niche focus like life sciences, given the amount of investment in that space, and a lot of managers, owners who are adapting their existing office, even in New York City, to life sciences.

Now, we're staying away from retail. I still believe retail is a falling knife. I still think there's a lot more, unfortunately, deterioration to happen in the retail space. I still think there's a lot of debt that's coming due. And I think it's going to be pretty messy for a lot of reasons.

We're staying away from full-service hotels with international travel dependencies. This is despite we hired a president earlier this year named Allen Smith, who was president and CEO of Four Seasons. And so he has a unique view there as well. But we think, for the time being, you're looking at 12 to 18 months based off the course of the virus and of course travel, where hotel, you know, you can get to some semblance of price discovery.

And we're also staying away from really central business district office, so New York City office, even parts of big markets like LA. And that's because there's still so much to be discovered in terms of just what's the will of tenants, of companies, and of people to return to these hubs where there's still safety concerns. Public transportation is a real issue. And until there's more clarity there, we don't think it's prudent to invest.

And so we're focused on those winners, so to speak. But we're also focused on asset class-- market as well, and geography, which I think is key.

ADAM SHAPIRO: And a lot of people in big cities are listening to what you have to say. Ryan Williams, Cadre co-founder and CEO, on the launch of Cadre Cash and much more. All the best to you.