Private placement securities offerings are complex, but thoroughly understanding them is essential for syndicators in order to secure capital and advance investment goals. They provide a streamlined and cost-effective alternative to public offerings, allowing you to raise funds for your real estate ventures more efficiently.

Knowing the different types of offerings can help you tailor your approach to attract the right investors and capitalize on market opportunities. Each has its own set of characteristics, advantages, and challenges.

Ultimately, you will need to choose the one that best aligns with your expertise and investment strategy. This guide will walk you through the various options to help you make the right decision.

Specified Offering

This type is ideal for new real estate syndicators without an established track record on commercial properties. It is also a good option for those who prefer to match individual investors to individual properties.

If you have one or more commercial properties under contract but require funds from private investors, then the Specified Offering model is suitable for you. It allows you to raise money to cover the following:

  • Down payment (for bank financing) or the full purchase price
  • Due diligence expenses
  • Acquisition fees
  • Legal fees
  • Other preliminary expenses
  • Closing costs

Keep in mind that you cannot utilize investor funds for the above items until after closing on the property. Instead, you use your own money or funds from a member of the management team. Once the property is secured, you can reimburse your expenses and charge an acquisition fee, provided you have raised sufficient funds from investors.

For a Specified Offering, you will need to prepare a Property Information Package to accompany the legal documents drafted by your securities attorney. It is not recommended for single-family acquisitions where legal fees often outweigh the required amount of money. In such ventures, other private money options such as private loans, Blind Pools, or Semi-Specified Offerings should be considered.

Blind Pool Offering

In this offering, you raise capital without specifying the exact properties to be acquired. Its structure relies heavily on the trust and confidence that investors place in your ability to select profitable assets after the funds are secured. But you would need to present them with a business plan or Investment Summary, which contains:

  • The types of properties you intend to acquire
  • Your proposed exit strategies
  • How the investment will generate returns for investors
  • Minimum and maximum dollar amount for the offering

The main advantage of this model for syndicators is being able to use company funds on deposits, due diligence costs, legal fees, and other preliminary expenses before closing on a property. But your investors need to understand that this money might be at risk and they cannot recoup some of it if you do not close on any deal. Alternatively, you could agree to treat the funds as a recourse loan you’ll personally repay if you do not acquire any asset.

This type of offering works best for experienced real estate syndicators who have established a successful track record of Specified Offerings with the same type of properties described in their business plan. Most successful Blind Pool funds are usually launched after conducting four or five successful Specified Offerings.

Semi-Specified Offering

A Semi-Specified Offering provides a middle ground between Specified and Blind Pool offerings. In this approach, you have at least one property under contract as well as a business plan with criteria for additional similar properties you plan to acquire under the same company. You also need to prepare a Property Information Package to accompany the legal documents drafted by your securities attorney.

To the eyes of investors, this combination is particularly appealing as it offers some predictability without sacrificing flexibility. They get a preview of your investment strategy while keeping the door open for future acquisitions.

On the other hand, it allows you to raise money to close on the property under contract and continue raising money while investigating additional properties to acquire. This approach also enables you to capitalize on emerging opportunities, as you’re not locked into a rigid property list.

Semi-specified offerings are well-suited for real estate syndicators who have identified a few promising properties but also want the freedom to respond to market dynamics. It demands a good level of expertise in both market analysis and property selection, as you’ll need to justify your initial choices while remaining adaptable to new opportunities.

Segregated Offering

Another hybrid of Specified and Blind Pool Offerings, Segregated Offerings create separate investment opportunities for each property within a single offering structure. For every new property you get under contract, your securities attorney will draft a separate Private Placement Memorandum (PPM) Supplement and Subscription Agreement. They will also form the Investor/Title holding Limited Liability Company (LLC), create its new Operating Agreement, and file with the SEC and state securities agencies.

One major advantage of Segregated Offerings for investors is the level of customization and control it provides to investors. They can diversify their investments across multiple properties or focus on the one that aligns with their risk tolerance and investment goals. This can make segregated offerings particularly appealing to investors who value having a say in their investment choices.

Syndicators also benefit from the time and money saved on legal drafting fees. However, managing a Segregated Offering can be more complex. Each property needs its own detailed reporting and communication strategy, and the administrative burden is higher. Additionally, the SEC will likely consider a series of Separate Offerings under a Master PPM to be integrated. Thus, if you are doing it under a Regulation D, Rule 506(b) exemption that allows up to 35 Sophisticated Investors, the Sophisticated Investors in each Separate Offering will be aggregated towards this limit.

A Segregated Offering suits real estate syndicators with robust systems in place for tracking and managing multiple properties simultaneously. It’s also ideal for those who want to purchase a series of single-family or smaller commercial properties with capital raises of several hundred thousand dollars. Specified Offerings are a more suitable option for larger offerings raising $500,000 or more.

The Bottom Line

Choosing the right private placement securities offering is crucial for aligning with your investment strategy and attracting the right investors. Each option—Specified, Blind Pool, Semi-Specified, Segregated—offers unique benefits and poses its own challenges. Your decision should be guided by your specific goals, market knowledge, and operational capabilities.

Deciding which of these four is the right choice for you is a conversation you should have with your securities attorney. They can advise you on the pros and cons of each scenario based on your experience level, track record, and the type of property you are interested in acquiring.

Consulting a securities attorney before deciding on any of the above options is essential for your company’s compliance. They can guide you on the suitable legal documents and regulatory filings necessary for your offering.


If you’re unsure about the right private placement offering for your real estate syndication, you don’t have to go it alone. Contact us for expert syndication and securities counsel! Shams Merchant is the leading real estate private equity and syndication attorney, representing clients in real estate projects across the country and structuring billions in real estate investment funds. Specializing in real estate syndications, fund formations, securities law, and private placements for commercial property investments and development, Shams has been featured in publications like Law360, the The Business Journal, BisNow, and The Real Deal.

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