In the past week, I have met with two private RE groups, both of whom have been in business less than 5 years and have accumulated roughly $400-$500MM of AUM primarily doing B/C multifamily in secondary/tertiary markets, using primarily family office capital for equity. Interestingly (or maybe not), both groups mentioned to me that they were either in process to become or wanting to become broker dealers for purposes of raising more capital going forward.
Perhaps a silly question, as I have never worked in the securities industry before, but what is the major upside for a real estate firm to do this? Is it to tap into previously unavailable sources of equity? Solicit capital from RIA's and the like? Manage the process in house rather than outsource to a 3rd party broker dealer?
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