There are many of us here in our hometown of Kansas City that are huge Chiefs fans. At a game this last season it hit us: putting together a real estate transaction is very much like a football organization. The players, coaches, and fans are all part of the important experience.
In this analogy, the players and coaches are the sponsors of the deal, and the fans are the passive investors. They’re all at the same place and have the same objective, but they have very different roles in the process.
If there is rain during the game, the opposing team starts blitzing or any other number of surprises, the players and coaches are the ones who are responsible for the action and reaction.
The coach might have a few comments going into the locker room at halftime about their view of the team’s performance, but the fans don’t have any active responsibilities in making the decisions or winning the game.
A real estate syndication is much like this. The passive investors, sponsors, brokers, property managers, and more, all share a vision to invest in and improve a particular asset. However, each person’s role in the project is different.
In this article, we’ll talk about exactly who those players are, as well as their respective roles in a given real estate syndication.
People in a real estate syndication
Here are the key roles that come together to make a real estate syndication happen:
- Real estate broker
- Lender
- General partners
- Key principals
- Passive investors
- Property manager
- Prevail Alternative Assets
Real estate broker
The real estate broker is the person or team who surfaces the property for sale, either as a listing or as an off-market opportunity (i.e., not publicly listed).
Having a strong real estate broker is crucial, as they are the main liaison between the buyer and the seller throughout the acquisition process.
Lender
The lender is the biggest money partner in a real estate syndication because they provide the loan for the property. The lender performs their own due diligence, underwriting, and gets a separate appraisal to make sure the property is worth the value of the loan requested.
They have important roles in bringing the project to fruition, but they are not part of the purchasing entity, nor do they share in any of the returns.
General partners
The general partners synchronize with the real estate broker and lender to secure the loan and acquire the property in addition to managing the asset throughout the life of the project, which is why they are often also called the lead syndicators.
The general partnership team includes both the sponsors and the operators (sometimes these are the same people).
The sponsors are the ones signing on the dotted line for the loan and are often involved in the acquisition and underwriting processes.
The operators are generally responsible for managing the acquisition and for executing the business plan by overseeing the day-to-day operations. Operators guide the property manager and ensure that renovations are on schedule and within budget.
Key principals
For a commercial loan, the sponsor is required to show a certain amount of personal liquidity. This reassures the lender that the sponsor can contribute additional personal capital to keep the property afloat if things were to ever go wrong.
One or more key principals may be brought into the deal to help guarantee the loan if the sponsor’s personal balance sheet is insufficient.
Passive investors
A real estate syndication’s passive investors have no active role in the project. They invest capital in exchange for a share of any returns. Like the fans at the game, they are there for the outcome, but they don’t make the plays.
Property manager
Once the property has been acquired, the property manager becomes arguably the most important partner in the project because they are the “boots on the ground” who execute renovation projects according to the business plan.
The property manager works closely with the operator (i.e., the asset manager) to ensure the business plan is being followed and that any unexpected surprises are addressed properly.
Prevail Alternative Assets
In our real estate transactions, Prevail Alternative Assets is part of the general partnership. Our main role is to lead investor relations, review conservative underwriting criteria, oversee management of the investment and help raise the equity needed.
We serve as advocates for investors: we review whether co-sponsors’ projections are conservative, whether deals are structured with investors’ interests in mind, and whether multiple exit strategies exist.
After the property is acquired, we become the liaison between the sponsor/operator team and the investors by providing updates, financial reports, and other important information between parties.
The rest of the team
In addition to the key roles discussed here, there are inspectors, appraisers, cost segregation specialists, CPAs, legal teams, insurance agents, and more, who work in the background on every transaction.
Originally published August 2022; updated September 2026 for the current firm name and disclosures.
For general information only; not an offer to sell or a solicitation to buy any security. Private real estate is illiquid and involves risk, including loss of principal. Past performance does not guarantee future results. Read the full disclosures