506(b) Syndication

Top-Ranked Real Estate 506(b) Syndication Attorneys

Shams Merchant is the leading attorney for Regulation D 506(b) real estate syndications in the nation, representing clients in hundreds of real estate private placements every year using the Rule 506(b) exemption in virtually all 50 states. In his 506(b) syndication law practice, Shams represents sponsors, syndicators and private investment firms across the country in their real estate syndication and fund formation matters, specifically using the SEC Rule 506(b) safe harbor exemption.

Our full-service real estate syndication and fund formation legal services include a start-to-finish representation for our clients on a flat fee basis. We are regarded as the national experts on launching real estate syndications and funds for sponsors, syndicators, fund managers and private equity firms and ensure all syndications and funds are 100% legally compliant with the SEC and other federal regulations.

What is SEC Regulation 506(b) and Why is it So Popular for Real Estate Investors and Syndicators?

Before we dive into Rule 506(b) of Regulation D, we must first establish that the SEC requires anyone issuing securities to register them with the SEC. However, Section 4(a)(2) of the Securities Act exempts issuers from registering transactions with the SEC if the issuer is not conducting a public offering.

Rule 506(b) of Regulation D is a “safe harbor” under Section 4(a)(2). Rule 506(b) allows syndicators and fund managers objective standards that they can rely on to meet the requirements of the Section 4(a)(2) exemption. Under Rule 506(b), real estate syndicators and fund managers can raise an unlimited amount of equity and investment capital and can sell membership interests in their syndication or fund to an unlimited number of accredited investors and up to 35 non-accredited investors. However, one limitation of an exempt offering under Rule 506(b) is that there is no general solicitation or advertising allowed to market the investment, syndication or fund and syndicators or fund managers must rely on preexisting relationships to market their offering.

It is also important to note that if non-accredited investors are participating in the offering, the syndicator or fund manager conducting the offering must also abide by the following rules:

1. The syndicator or sponsor must give any non-accredited investors disclosure documents that generally contain the same type of information as provided in Regulation A offerings.
2. The syndicator must give any non-accredited investors financial statement information specified in Rule 506 and should be available to answer questions from prospective purchasers who are non-accredited investors.

It is important to also be aware that investors in a Rule 506(b) offering receive “restricted securities.” Our real estate securities attorneys file the required notices with the SEC, which is called a Form D within 15 days after the first sale of securities in the offering. Additionally, our real estate securities attorneys also file all state notice filings and collect state fees in accordance with state securities laws.

Syndicators and fund managers conducting an offering under Rule 506(b) are subject to “bad actor” disqualification provisions, and our syndication lawyers ensure that they are not disqualified from conducting such offerings.

Our experienced syndication and SEC attorneys guide hundreds of GPs, sponsors, syndicators and private investment firms each year on structuring and launching successful 506(b) syndications and real estate funds in all 50 states.

What Real Estate Investments Can You Make with a 506(b) Syndication or Fund?

Real estate syndicators and fund managers can invest in virtually every type of real estate asset class with a 506(b) real estate syndication or a 506(b) real estate fund. The following are examples of the real estate asset classes our syndication lawyers have structured 506(b) syndications and funds for:

• Mixed-Use Projects and Redevelopments
• Commercial Office Buildings
• Multi-Family and Apartments
• Retail Centers and Shopping Centers
• Restaurants and Hospitality
• Industrial/Warehouse Properties
• Luxury Condominiums
• Raw Land Development
• Master Planned Communities

What Legal Documents Are Required for a Real Estate 506(b) Syndication or Fund

Our syndication attorneys draft and structure all legal documents necessary to conduct a 506(b) offering in any state in the country. The legal documents may include the following:

• Formation and structuring of GP/Manager entities
  • LLC 
• Formation and structuring of Fund (Syndication) entity
  • LLC or LP (per CPA guidance) 
• Governing Documents 
  • Company (Syndication) Agreement/Partnership Agreement 
  • GP/MGR Company Agreement/Sponsor Company Agreement 
  • Unanimous Written Consent 
• Investor Offering Documents 
  • Subscription Agreement 
  • Investor Suitability Questionnaire 
  • Private Placement Memorandum (PPM) 
• Securities Compliance 
  • Securities Act of 1933 Counsel 
    • SEC Form D Filings 
    • R.506(b/c) counsel 
  • State securities BlueSky notice filings counsel 
  • Investment Company Act Counsel 
  • 3(c)(5) Exemption

Moreover, our real estate syndication law firm also provides the following additional services, which our clients truly appreciate:

• Marketing Compliance Review; audits 
  • Pitch Deck legal disclaimer assistance 
  • We assist you/your fund administrator in signature audits for complex issues, if necessary
• Capital Raising Assistance
• Executive Summaries
• Investment Summaries

Real Estate Law Services Our Expert Syndication Attorneys Provide

Our real estate syndication attorneys do more than just structure the syndications and funds for our clients. Our attorneys also represent clients in the full cycle of their real estate investments and development projects and provide the following real estate law services:

• Planning and Development
• Purchase and Sale Agreements
• Title Review and Curative Matters
• Closing and Conveyance Documents
• Acquisitions and Dispositions
• Structuring Joint Ventures and Partnerships
• Joint Development Projects and Investments
• Lending and Financing Matters
• Construction Contracts
• Commercial Leasing for Office, Retail, Industrial, & Mixed-Use Projects
• Zoning, Land Use, Restrictive Covenants, & Deed Restrictions
• Closing & Title Insurance
• Real Estate Tax Planning
• Due Diligence Assistance

More About Top-Ranked 506(b) Syndication Attorney Shams Merchant

With experience working award-winning real estate projects and over $8 billion in transactions, Shams is the leading lawyer in commercial real estate and real estate private equity law. He represents clients nationwide on the purchase, sale, development, leasing and financing of commercial real estate projects between $1 to $350 million, including retail, mixed-use, office, industrial, hospitality, restaurant & bars, and multi-family. Shams also represents clients in joint-ventures, business structuring, entity formation, and real estate fund formations and syndications (including 506(c) and 506(b) private placements). Shams believes access to sophisticated and responsive counsel should not cost a premium. With that in mind, Shams provides a cost-effective and value-added service to his clients, whether they are new to the real estate or private equity business or a seasoned player. By working with his clients to reduce their legal spend, Shams has helped his clients increase the ROI on their real estate projects and the overall profitability of their businesses. As the authority in 506(b) syndication law, Shams was recently featured in Law 360, PLI, The Business Journals, JD Supra and The Real Deal for his work. His projects and clients have also been featured on numerous regional and national industry publications.

For more information on Shams Merchant’s 506(b) law firm practice, please contact Shams via email at shams@mwfirm.com or by phone at (832) 451-2594. You can also schedule an appointment using the link below.