General

How does Sphere Realty Capital work?

Sphere Realty Capital is an online marketplace for commercial real estate for accredited investors, institutional investors and real estate companies. Accredited investors can invest in pre-vetted real estate investments online through a simple and secure website by creating an account, selecting an investment, signing legal documents and funding their investment. Institutional investors can view single asset or portfolio joint venture opportunities as well as longer term strategic opportunities. Real Estate Companies can raise equity from either accredited or institutional investors by filling out an online application, creating an account and submitting opportunities to Sphere for review. All members can participate in the buying and selling of commercial real estate properties through the Sphere Platform.

Who is Sphere Realty Capital?

Sphere Realty Capital is a team of real estate professionals with extensive finance and real estate experience that have participated in over $20 billion of public securities offerings for real estate companies. Please click here to view the team member biographies .

Is the Sphere Realty Capital website secure?

Yes, the security of all of our members and their information is of paramount importance. Sphererealtycapital.com utilizes Secure Sockets Layer (“SSL”), which is the industry standard for internet security technology. SSL is used by millions of websites for the protection of their users.

Are there fees to join?

There are no fees to create an account or view available opportunities or properties for sale. Investments in private placements on the Sphere Website are be subject to fees and the member should review the private placement memorandum, subscription agreement and operating company agreement, as applicable, for additional information.

Can I refer users to Sphere?

Yes, your user dashboard includes a referral function in which you can invite other users to join the Platform.

Individual Investors

When I invest through Sphere, what do I own?

Sphere sets up a separate Limited Partnership (LP) or Limited Liability Company (LLC), for each individual investor investment opportunity that is listed on the Sphere Platform. That Sphere LP or LLC will in turn make an investment into a Real Estate Company’s (Sponsor’s) LLC or LP that owns the real estate property. When you invest through Sphere, you own shares in that Sphere LP or LLC.

How do Individual Investor offerings work on Sphere?

Sphere is an online investment platform that uses the internet to pool investors into funds that hold an interest in a specific private real estate investment. Individual Investor members have access to information on a variety of investment opportunities and can invest into each opportunity through a discrete Sphere Limited Partnership or Limited Liability Company. Execution of investor documents are managed securely through Docusign and all fund transfers are made through an FDIC insured financial institution.

Who is eligible to invest on Sphere?

Only Accredited Investors can invest in the private placement offerings on the Sphere Platform, which means you must meet certain thresholds as defined by the Securities and Exchange Commission. As an individual investor, you must have an annual income per individual of over $200,000 per year ($300,000 including spouse) with the expectation of that continuing, or a net worth of more than $1 million, excluding the value of a primary residence.

How does the investment process work?

Investors can review real estate investments online through a secure website by creating an account here, selecting an investment, signing legal documents and funding their investment. Prior to investment, the funds are held at an FDIC insured financial institution. Once the investment target is achieved, the funds are transferred to make the specific investment.

Are the investments risky?

Yes, these investments are highly speculative and illiquid, and investors should be able to bear the loss of their entire investment.

Does Sphere recommend investments?

No. While Sphere provides its members with relevant information on the investments on the Sphere Platform, Sphere does not make recommendations about any investment and each investor must exercise independent judgement and do their own due diligence before making a decision to invest.

How do investors track their performance?

All investors have access to their personalized, Sphere dashboard. Through the dashboard, investors can track how much they have invested, which investments are active and they can monitor potential investments that they are tracking. Additionally, Sphere will provide quarterly updates via email to the investor.

How long is the investment period?

The investment period varies widely depending on the specific investment. Please review the expected hold period for each investment before making a commitment.

Once I join Sphere, can I invest in an offering immediately?

No, we require a waiting period of 30 days to allow you to become knowledgeable with the Sphere Platform and the investment opportunities. During this 30-day period, you will have full access to the Platform but we will not be able to accept any funds from you until the 30-day waiting period has passed.

How do investors transfer funds to Sphere?

Investors can use either ACH transfers or wire transfers. Sphere will provide specific funding details for each offering including account numbers to ensure that funds are properly received by Sphere.

Why do investors invest into a Sphere Limited Partnership or Limited Liability Company instead of directly into the entity that holds title to the real property?

By investing into a Sphere Limited Partnership or Limited Liability Company, it simplifies the transaction for the Real Estate Company by allowing them to work with directly with Sphere rather than a large number of individual investors. This efficient structure is desirable to real estate companies and thereby allows Sphere to access more investment opportunities for its members.

Who makes decisions in a Limited Partnership or Limited Liability Company?

Decisions in a Limited Partnership or Limited Liability Company are governed by the operating agreement. While every operating agreement is different, they typically include a general partner or managers and limited partners or members. The general partner or manager typically makes all of the day-to-day decisions and the limited partners or members are passive investors.

Can I invest if I am a foreign investor?

No, Sphere is not currently available to non-US investors.

What happens if the target funding amount is not met?

If the target funding amount is not met, the funds transferred by you will be returned (without interest). Please note that in certain cases, the target funding amount may be increased to accommodate high investor demand.

Are these investments liquid?

No, the private real estate investments on the Sphere Platform are not traded on a public market and as a result, your shares in these investments cannot be easily traded or sold. Each investment has a unique projected "hold period". The hold period is the expected time investors will be involved with the investment until it is sold. Please note that the "hold period" is an estimate and may differ from the actual hold period for the investment. For more details regarding the hold period, please review the applicable offering materials.

How often should I expect distributions?

Distributions depend on the specific investment and no distributions are guaranteed. All distributions are at the discretion of fund management and will only be available if there is sufficient capital to fund the distributions. If applicable, the private placement memorandum for the offering will include a pro forma cash flow distribution schedule.

Is there an obligation to invest more beyond the initial investment?

No, Sphere does not typically participate in capital calls if required by an investment rather Sphere typically agrees to be diluted by the additional capital required. Please review the treatment of capital calls in the operating agreement for each opportunity before making an investment.

Institutional Investors

What will I have access to on the Sphere website?

As an institutional investor, you will have access accredited investor offerings and institutional investor offerings as well as the ability to buy and sell commercial real estate.

How do institutional investor opportunities work?

The offerings for institutional investors on the Sphere website are typically structured as single asset or portfolio joint ventures. The terms of these joint ventures are not fixed and will be the result of a dialogue with the real estate company.

What is Sphere’s role in the institutional opportunity process?

Sphere typically acts as an advisor to the real estate company or sponsor of the opportunity to assist them with marketing and structuring the capital raise from an institutional investor.

Real Estate Companies and Real Estate Sponsors

What is the process to raise capital with Sphere?

The first step is to create an account with Sphere which you can do here. Then through your dashboard, you can submit an opportunity for review. After submission, Sphere will contact you to discuss the opportunity in further detail.

How much capital can be raised through Sphere?

Sphere offers two channels to raise capital for Real Estate Companies either through Accredited Investors or Institutional Investors. Capital raises that are under $5 MM are typically best accomplished through an Accredited Investor raise. Capital raises that are over $5 MM and up to $100 MM are more likely to be a joint venture with an Institutional Investor. The Sphere team has decades of experience and has participated in over $20 billion of capital raises for real estate companies and has advised some of the largest real estate owners in the U.S. Please submit your opportunity and we will work with you to determine the best capital solution for your needs.

What types of properties does Sphere raise equity for?

Sphere is open for all commercial real estate property types across any U.S. location.

What types of Real Estate Companies does Sphere work with?

The Sphere Platform is available to all Real Estate Companies engaged in the professional management and ownership of commercial real estate. Sphere evaluates prospective capital raises and prospective properties for sale submitted by Real Estate Companies on a case by case basis.

Does Sphere run background, criminal and credit checks?

Yes, Sphere runs these checks as part of our due diligence process.

How are Accredited Investor raises structured?

Sphere invests as a single limited member into a sponsor’s Limited Liability Company (“LLC”) or Limited Partnership (“LP”). All Sphere Accredited Investors are pooled into a special purpose vehicle, typically an LLC, and then Sphere subscribes to the Sponsor’s entity as a single investor. This means that the Real Estate Company is only responsible for one report, one distribution and one set of tax filing documents. Sphere processes all of the underlying reports, distributions and tax documents for the Accredited Investors in the Sphere LLC or LP.

How are Institutional Investor raises structured?

Institutional Investor capital raises are typically negotiated and structured on a case by case basis as determined by the Real Estate Company and the Institutional Investor. For these capital raises, Sphere will act as the Real Estate Company’s advisor to source the appropriate Institutional Investor partner and to advise on deal structure.

What reporting is required?

For accredited investor offerings, Sphere requires quarterly reports.

Does the sponsor interact directly with the Accredited Investor?

Typically, no. Sphere will have all the required correspondence with the participating accredited investors and the Sponsor will work directly with Sphere.

Who is Tobin and Company?

Sphere is aligned with Tobin & Company Securities LLC a broker-dealer and member of FINRA/SIPC and members of Sphere are also registered representatives with Tobin. All private placements are processed through Tobin & Company Securities LLC.

For Accredited Investor capital raises, does Sphere require control rights or any other rights?

Sphere evaluates the control rights that it may require on a case by case basis but, in general, Sphere is a passive investor. Sphere does require manager removal for gross negligence, fraud or other willful misconduct.

How long does it take to fund a transaction?

While each offering is different, most transactions can be funded in 30 days after it is posted on the Sphere Platform. Sphere’s due diligence on the opportunity and the sponsor typically takes 2 to 3 weeks.

How are capital calls handled?

Sphere typically will not participate in capital calls. In most cases, Sphere will agree to dilution in the event of a capital call.

Buying and Selling Properties—Commercial Brokerage

Who can view properties that I list for sale on the Sphere Platform?

Sphere provides two processes to list a property for sale either closed or open. In a public listing, any member of the Sphere Platform can view the general information on the property such as the teaser. In a private listing, Sphere limits the listing so that only select members have access to the listing, which is more in line with a traditional brokerage process. In either a public or private listing, Sphere will require execution of an NDA by any member requesting more detailed information.

Why would I choose an open process to sell my property?

While many traditional brokerage processes for commercial real estate are conducted on an invitation only basis, there are some distinct advantages to an open process through the Sphere Platform. With an open process, the property is available for “expressions of interest to invest” from accredited investors and institutional investors. Sphere can use these indications to potentially offer financing assistance to the buyer of the property, which augments their access to capital and possibly their ability to close the transaction.

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