A syndicate is a group of person or legal entities who come together to carry out a particular activities. In the typical syndication, a limited partnership is formed with a group of investors providing the equity capital. The syndication is made with general partner’s experience and investor’s money. When the transaction is over, general partner gets the money, and investors get the experience. The real estate syndication combines investment and management for the real estate property. It means that the real estate syndication is a group organized to develop a parcel of land, purchase an entire portfolio of properties, make mortgage loan, and perform other real estate activities. The purpose of the syndication may be for the development of office complex or apartments or acquiring land for development. The real estate syndication allows a developer to acquire nonconventional funds for a development through group of individual investors. There are several stages of process. First, divided into original phase, operations phase and completion phase. The syndicator works as a general partner, and he is responsible for partnership affairs of acquiring, operating and completing stages. In the original phase, a syndicator is responsible for planning syndication, marketing investment units to investor or corporation and complying with disclosure and rule that deal with securities. During the operation phase, a syndicator is managing the syndicate itself and property, reporting to the partners, accounting activities and preparing tax information and administration of partnership funds. Finally, in the completion phase, a syndicator is preparing property for sale, marketing it a managing residual assets and distributing them to investors. With pooled ownership structures, the investors can receive income, appreciation and tax benefits produced by direct investment. In addition, through their multiple purchasing of syndication, the investors expect to receive the benefit of diversification, economic scale of acquisition, disposition of properties, and the ability to obtain debt financing and the expertise of the management team assembled by the ownership. The real estate syndication gives the smaller investors a new access to real estate, just as the money market fund for short term investment and the mutual funds offered to access shares.
