LOS ANGELES—Over the last 25 months, private real estate equity syndications generated a preferred return for investors of approximately 7.7% with a common figure rate of 8%, according to Realty Mogul's 3Q14 survey of real estate syndications. The survey, which GlobeSt.com has received exclusively, reviewed 311 private placements pulled from 182 private real estate investment companies. These private placements total $5 billion in properties, which had an average individual value of $18.5 million.

In addition to the favorable returns, the survey also shows that after investors are paid the preferred return, the transaction sponsors are paid what is known as a “promote,” or the extra share of the upside—much like a “carried” interest, of 29% of the excess distributable cash flow. The remaining 71% is divided among the investors.

“One of the interesting things about these findings is the consistency,” Jilliene Helman, the founder and CEO of Realty Mogul, tells GlobeSt.com. “We have seen both ends of the spectrum. You might have a transaction that has a very favorable promote structure to the investor, or one that has a very favorable promote structure to the sponsor, but I think on a holistic basis, there is a pretty good gauge in the market. The surprising thing to me there was that the market was still trending in the same place even given the fact that nobody has published statistics like this before. Most of these transactions have a 70/30 promote structure, and I think it is really indicative that the sponsor is backing into net returns. They end up in a very similar place typically.”

Helman also thought the survey revealed an inconsistency in the fee structure. The fee structure is very different,” she explains. “Some transactions had asset management fees has high as 9% when you have an average of 1.2%. The differential there is massive. There is still not a standard fee structure for private placements.”

Realty Mogul has been producing these reports sporadically to provide transparency. In fact, to our knowledge and Realty Mogul's knowledge, the crowdfunding platform is the only entity producing this type of data. “We don't share anything on a named basis, but on a macro basis. We share collective data across the platform,” says Helman. “If I am going to do a private real estate syndication or a private placement, this shows where my market is and where my pricing needs to be.” Providing statistics like this is essential to the success and growth of the industry, and she believes this data has benefits for both investors and sponsors. “We fundamentally believe that you should give data freely to investors, and you should give data freely so that you can have a broader overview of the market,” she says. “I think that a lot of that has to do with being a new age technology company, and as such, our belief is that this data shouldn't be held close to the vest.“

Real estate syndications have come a long way with the edition of the Internet, which has rebranded the practice as crowdfunding, along with a wealth of new SEC regulations. At the recent CCIM Thrive conference, Realty Mogul's chief production officer Elizabeth Braman sat down with other industry leaders to discuss the ever-evolving regulatory environment.