Fred Lewis, Co-founder & CEO; and Dennis Cisterna, Co-founder & Chief Investment Officer, Sentinel Net LeaseFred Lewis, Co-founder & CEO; and Dennis Cisterna, Co-founder & Chief Investment Officer
Anyone with a smartphone and a bank account can invest in stocks, bonds, and even cryptocurrency. Yet, 2022 is teaching new investors a valuable lesson: Public investment markets are complicated, volatile, and wildly inconsistent.

Commercial real estate, on the other hand, can create a more reliable revenue stream for investors. Real estate values usually rise with inflation, and tenants often have long-term leases that can outlast temporary downturns. Even as stock earnings slow or decline, commercial real estate property can keep earning income.

So why don’t more people invest in commercial real estate? The co-founders of the private equity firm Sentinel Net Lease believe it’s because of the formidable obstacles potential real estate investors face.

An investor with a smartphone app can enter the stock market with $5, or even less, within a couple of minutes. Meanwhile, commercial real estate investors may need millions of dollars to buy property, a management staff, a marketing firm to attract tenants, a variety of insurance policies, an attorney on retainer, and time for this investment to start earning income.

Sentinel Net Lease has embraced the challenge of lowering these barriers to the commercial real estate market so more mid-level investors can enter. Sentinel buys specific types of commercial properties and handles all the day-to-day work of managing them. Accredited investors are allowed to invest alongside Sentinel and participate in the monthly income and potential profit from the eventual disposition of the assets.

“We are providing investors an alternative so investors can diversify away from the stock market into CRE by handling all aspects of their investments,” said Dennis Cisterna, chief investment officer and co-founder of Sentinel.

Dennis Cisterna and Fred Lewis, another commercial real estate veteran and Sentinel CEO, co-founded Sentinel in 2019. They set out to combine data-driven analytics with old-fashioned boots-on-the-ground real estate knowledge to find and buy income-producing commercial properties. Their goal was to target commercial real estate’s middle market (assets between $5MM to $50MM) so investors can earn a steady income without facing the typical workload and potential for risk that comes along with owning commercial property.
Of course, in 2019, the co-founders had no idea COVID-19 was just months away from shutting down and transforming the American economy. In a way, the pandemic served as an immediate stress test for Sentinel’s strategy.

With tenants like Amazon, Tesla, and T-Mobile under long-term net lease agreements, Sentinel’s properties have generated strong cash-on-cash returns, establishing a dependable monthly income for the firm’s investors. Even amidst the uncertainty created by the pandemic, Sentinel continued to grow, increasing their assets under management to $250MM+ by Q2 of 2022.

By democratizing the CRE investment space, we are making Wall Street caliber investment accessible to Main Street investors

This success can be attributed in part to Sentinel’s strategy. The firm doesn’t simply gather up available commercial properties as a way to attract investors. In fact, when it comes to acquiring properties, Sentinel does more curating than collecting.

The firm’s acquisition team chooses only investment opportunities that meet its specific criteria. Often this means the team selects properties located in top-100 metro markets, especially in value-oriented markets through the Midwest and Southeast. In most cases, this also means choosing properties with stable tenants. The team uses a host of economic and demographic data to identify emerging markets before other investors zero in.

“Our rapid growth in the CRE investment space has been possible due to an incredibly talented and knowledgeable team,” Cisterna said. The firm boasts a solid core of professionals that have deep-rooted experience in the world of real estate, asset management, and finance, working for notable firms such as HSBC and Wells Fargo.

Commercial real estate investing may never boast the instant access of the 21st-century stock market. That’s due, in part, to the main strengths of real estate as an asset class: Its permanence and stability. But with firms like Sentinel building bridges, more investors can enter this market and enjoy the benefits of commercial real estate as an asset class.

“For accredited investors looking to diversify their portfolio with alternative investments in real estate, we offer a consistent investment vehicle with strong asset management,” Lewis said. “By democratizing the CRE investment space, we are making Wall Street caliber investment accessible to Main Street investors.”