How Goldman Sachs launched a non-traded mortgage REIT, in 10 steps...
1. Get organized:
“The Adviser and its affiliates have incurred organization and offering expenses on our behalf of approximately $0.8 million.”
2. Leverage your brand:
“We will use Goldman Sachs’ vast network of relationships and expansive insights to source opportunities and inform our real estate investing approach.”
3. Choose your strategy:
“We will generally seek to make loans targeting 70-75% of the collateral value for individual debt investments. ...typically with an initial term of two to three years with five-year fully extended maturities.”
4. Leverage your investments:
“...our target REIT-level leverage ratio will be approximately 60-75%.”
5. Have a platform:
“Goldman Sachs Asset Management Real Estate is one of the largest global originators of high-yield real estate credit, having deployed approximately $20 billion globally since 2008...”
6. Disclose conflicts:
“There can be no assurance that our interests will not be subordinated to those of Goldman Sachs, funds sponsored by Goldman Sachs or other clients to our detriment.”
7. Hire a placement agent:
“The Placement Agent is entitled to receive upfront selling commissions of up to 3.0%. ...such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 3.5% of the transaction price.”
8. Create a revenue stream:
“We pay the Adviser an annual management fee (payable monthly in arrears) of 1.25% of aggregate NAV.”
9. Create another revenue stream:
“The Adviser may be entitled to a performance fee..."
"...the performance fee will be an amount, not less than zero, equal to (i) 12.5% of our cumulative Core Earnings for the immediately preceding four calendar quarters..."
"...subject to a hurdle rate, expressed as an annual rate of return on average adjusted capital, equal to 5%...”
10. Find investors:
“In June 2024, we commenced a continuous private offering initially of up to $1,000,000,000 in shares of our common stock in our primary offering...”
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