What is USREM?
USREM, the US Real Estate Market, is a capital markets platform for institutional-grade, primary and secondary Limited Partner investments in real estate syndicates from leading sponsors across the US. USREM works directly with sponsors seeking to provide continuous, confidential, on-going liquidity to their LPs across the life of a syndicate, and provides
institutional, family office, and HNW investors with tools to discover, acquire, sell, and borrow against, primary and secondary LP interests in off-market syndicates.

What types of real estate are appropriate for the USREM platform?
While there are both opportunistic investments and new developments offered on the platform, the majority of properties listed on USREM fall into the Core and Core Plus category of longterm investments with stable cash flows. What is the minimum property value on the USREM platform? Property values should be suitable for secondary market sales. In general, property values in the range of $25m to $250m would be typical, although the platform lists properties from under $10m to over $500m.

What is the minimum investment for investments through the USREM platform?
The minimum on the platform is $100,0000 per investment, although specific individual properties may have higher minimums at the discretion of the Sponsor.

Is USREM a broker/dealer?
No. USREM is an online platform that facilitates liquidity for GP and LP primary and secondary interests through technology and matchmaking tools. We do not currently charge any
transaction-related fees. In the future, we, or a subsidiary, may register with the SEC as a broker/dealer.

Under what SEC exemption are you operating?
USREM is currently a technology and matchmaking platform and does not operate as a regulated business. Transactions among Sponsors, Limited Partners, and prospective investors are typically exempt under SEC Regulation D (for primary sales by the Sponsor) and SEC Rule 144 or Section 4(a)(7) for secondary sales by Limited Partners.

How does USREM make money?
We charge Sponsors an annual technology fee of $5,000 per syndicate to maintain a profile on the platform, and we may charge administrative fees to verify and maintain the accounts of investors. In the future, we, or a subsidiary, may register as a broker/dealer and charge commissions on transactions and origination fees on interest-backed lending.

Does the Sponsor need to exclusively sell primary interests through USREM?
No. The platform is non-exclusive for primary sales, and the Sponsor is free to sell LP interests through any channel. Sponsors may choose to close such transactions using the USREM automated closing process, but they are not required to.

How does a Sponsor list a primary offering on the USREM platform?
The Sponsor provides USREM with the offering memorandum and other documentation which we maintain on the platform, where it can be viewed only by pre-cleared, pre-qualified
accredited investors who have executed a specific non-disclosure agreement before they can see information about the property.

What information does the Sponsor need to provide, and how often?
When listing a property on USREM, the Sponsor provides profile information for the Sponsor, the original Offering Memorandum and Operating Agreement for the syndicate, and the Subscription Agreement. These materials are made available only to prospective investors who have been pre-cleared, pre-qualified, and who have signed a non-disclosure agreement. The Sponsor also provides USREM with the syndicate’s cap table and LP contact information, which is held in confidence and only used to administer the platform. On an ongoing basis, the Sponsor provides annual financial statements for the syndicate (preferably audited in accordance with GAAP) with quarterly updates.

How does USREM market the platform to potential LP investors?
USREM engages in regular marketing and outreach programs to attract potential investors to the platform, including through Search Engine Marketing, Search Engine Optimization, direct mail, partner programs with other groups, and through USREM’s own network and contacts.

How does USREM qualify prospective investors/purchasers?
Before a prospective purchaser is given access to properties on the USREM platform, they go through a full series of Know Your Client, Anti-Money Laundering, and SEC “bad actor”
background checks. Before they are given access to the details of any specific syndicate, they are required to execute an online, Non-Disclosure Agreement specific to that property.

How is a transaction consummated between the Sponsor and a prospective investor?
Once the Sponsor and a prospective investor come to terms on an investment, USREM will facilitate closing of the transaction through secure electronic document and signature exchange, based on the subscription documents provided by the Sponsor.

At what point after a primary sale will LP interests be available for resale?
Following completion of all primary sales by the Sponsor, LP interests may be resold under either the SEC Rule144 or Section 4(a)(7), both under the Securities Act of 1933. Under the
former there generally is a minimum holding period of 1 year before resale, and under the latter (which requires that the Sponsor provide specified information, including GAAP audited financial statements) syndicate interests must be outstanding for at least 90 days.

Does the Sponsor need to use USREM exclusively to enable secondary LP sales?
Yes. To ensure a liquid market for secondary transactions, interest needs to be aggregated in a single location. However, USREM will work with SEC-registered brokers and placement agents, who may charge commissions for facilitating secondary LP transactions.

Can a Sponsor use USREM only to facilitate secondary sales for an existing syndicate?
Yes. Primary sales are not a requirement for a Sponsor to use the USREM platform to provide potential liquidity to LPs of existing syndicates at any point in their life cycle.

Can a Sponsor use USREM only for primary sales but not permit secondary sales?
No. The prime feature of USREM is that all interests bought and sold through the platform are potentially liquid through secondary resale on the USREM platform. Primary sales are facilitated only for participating Sponsors.

How long is the term of the agreement with USREM?
The term of the agreement is until the earlier of a sale of the property, the termination of the Syndicate, or ten years following the effective date of the agreement between the Sponsor and USREM.

What prices are displayed on the platform for a given property/syndicate?
Displayed pricing is based on the valuation and current Net Operating Income provided by the Sponsor. For secondary sales of existing LP interests, prospective purchasers may make bids against those prices, which are then relayed to investors who have indicated an interest to sell.

Do you show the prices that LPs are asking for their interests?
No. LPs confidentially indicate to USREM the price level above which they may entertain an offer to purchase some or all of their interest, and they are privately notified when an offer is made at or above their target price.

Do you show or publish information about completed transactions?
No. USREM is not a public market, and no information is ever published about the existence, amount, price, or parties to any transaction or offer.

How are LPs able to borrow against their syndicate interests?
USREM works with Openstock, a capital lending platform for illiquid assets. Openstock will internally and confidentially underwrite each syndicate listed on the platform, and then provide a standing offer—displayed on their USREM dashboard—to each LP, indicated the maximum amount they can borrow against their LP interest.

Will anyone, including the borrowing LP, see the underwritten value of the syndicate?
No. LPs see only the absolute amount they may borrow, which is a factor of the syndicate’s underwritten value, Openstock’s proprietary LTV ratio, and size of the LP’s syndicate interest.

What percentage of the underwritten value of an LP’s interest may they borrow?
Openstock will typically lend between 25% and 40% of their underwritten value of the LP interest, in a range between $1m and $200m.

What are typical terms for loans against LP interests?
Currently, Openstock’s rates for borrowers are under 10% pa, with terms of six to 36 months.

Does borrowing by the LP require encumbering the syndicate or underlying asset(s)?
No. The lending transaction is a recourse loan between the Limited Partner and Openstock and is secured solely by the LP’s net interest in the syndicate. If the lender needs to attach the interest, that transaction is treated as a standard, confidential sale on the USREM platform, which has already been approved by the GP. Openstock is then treated as any other LP.

Who is behind USREM?
The US Real Estate Market is a venture founded by experienced US real estate and securities industries executives and funded by a consortium of major real estate industry firms and
financial industry venture capital funds. Biographies of our management and advisory teams can be found at usrem.co