In commercial real estate, the sponsor is an individual or company in charge of finding, acquiring, and managing the real estate property on behalf of the partnership. The sponsor is usually expected to invest anywhere from 5-20% of the total required equity capital. They are then responsible for raising the remaining funds and acquiring and managing the investment property’s day-to-day operations. In a limited liability company (LLC) or a limited partnership, the sponsor usually acts as the general partner or manager. The sponsor handles the distribution of payments, reports, communications, and tax documentation to individual investors.
Expertise is gained through experience, with sponsors transacting on numerous deals across multiple commercial real estate cycles. A more established sponsor’s network of banking relationships and capital sources complement their expertise, providing negotiating benefits and bringing favorable terms to a project. We tier our sponsors based on their experience and track record so our investors can get a sense of the firm behind the deal.
Learn more about our four sponsor designations and the CrowdStreet deal review process.