Kim Lisa TaylorSecurities Attorney, Founder, Syndication Attorneys, PLLC · Corporate Securities Attorney, 2x Best-Selling Author, Nationwide Speaker | Private Placement

Maximizing Investor Returns in Syndication Projects

23 Jul 2024 · 1 min

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In this excerpt, the speaker explains why real‑estate syndication investors demand higher projected returns than traditional stock market investments. He notes that a modest 3% return would be unattractive compared to a typical 7% stock market yield, so syndicators must aim for around 8% to entice investors. For development projects, the perceived risk is greater—market shifts could lower rents or sale prices—so investors expect even higher compensation, often seeking returns in the mid‑teens up to the low‑20s percent range.

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Because again, the investor's looking at, well, why would I invest with you for a 3% return for this year when I could have 7% in the stock market? You know, so it's hard to get them to invest unless they see that 8%. But you can on a, you know, and the other thing you can do is on a development project. A lot of times on a development project, the projected returns have to be even a little higher because it's a perceived greater risk investment. What if the market changes by the time the project is done and you can't command the rents that you wanted or the sale price you wanted? So there, people are looking for higher returns than the mid-teens. They're looking more for, you know, like the low 20s.