Executives at Cadre eagerly watched SoftBank's Vision Fund dole out billions of dollars to companies like Uber, WeWork and Slack Technologies. Then they got their chance.

After presenting Cadre's real estate platform and its budding technology to the fund's representatives in New York, CEO Ryan Williams flew to Tokyo in early 2018 at the invitation of Masayoshi Son, who oversees the $100 billion fund. The talks were promising.

But there was a hitch: Cadre co-founder Jared Kushner.

SoftBank wanted him to divest his ownership stake in the company, according to two people familiar with the matter. The request, not previously reported, was meant to head off any possible conflicts of interest or any suggestions that people doing business with Cadre were trying to curry political favor. That's because Kushner has become a top adviser to his father in law, President Donald Trump, overseeing a broad foreign policy portfolio.

The SoftBank talks fizzled.

Like Trump, Kushner declined to shed all of his business interests upon joining the White House. Asked about his Cadre holdings and possible conflicts, a spokesman for Kushner said he "took himself out of all decisions and operations and became only a passive shareholder in Cadre" when he moved to Washington.

Cadre and SoftBank declined to comment about the matter or whether Kushner ever entertained selling his stake.

- - -

SoftBank's decision to take a pass was a missed opportunity for Cadre that frustrated some top executives. Founded five years ago by Williams with a Harvard classmate, Josh Kushner, and his brother Jared, the company has grown into a midsize real estate manager with more than $800 million invested through its web marketplace.

Despite that growth, its biggest ambition hasn't been realized. Williams' vision was to make real estate investments easy for the masses, sort of an Amazon for the real-estate obsessed who want to buy and sell shares of commercial properties. Only accredited, high net worth individuals can participate under current regulations, however. Similarly, Cadre's plans to use artificial intelligence to uncover hidden investment opportunities have run up against the limits of property data, which is scattered and disorganized.

Along with those obstacles, Cadre has had to weave a path around the Kushners' rising political profile, executive departures and some inflated business claims, according to company documents reviewed by Bloomberg News and interviews with more than a dozen investors, current and former employees, and others with knowledge of its inner workings.

Cadre's engagement with SoftBank exemplified those problems. When Vision Fund representatives traveled to Cadre's offices in the Kushners' historic Puck Building in downtown New York early last year, Williams' executives made a forceful pitch.

The Cadre executives said they were already making "data-enhanced" decisions. In a demo, executives typed in a street address to get all sorts of data that might interest an investor: net operating income, occupancy rate, lease terms. But Cadre hadn't been using the tool; instead, Cadre had built it in the weeks ahead of the presentation, expressly to impress SoftBank, two people familiar with the matter said.

After this article was published, a person close to Cadre disputed that account. "The only software Cadre showed during the SoftBank meeting was the standard platform demo that includes Cadre's primary marketplace and investing experience that thousands of customers have used. Anyone who suggests otherwise is completely misinformed or not telling the truth," the person said.

There's no indication that SoftBank questioned the viability of the software. Start-up companies seeking financing often present an aspirational version of their product, even if it's not yet ready for commercial use. Vision Fund executives were impressed enough by the meeting to push Cadre up the chain to SoftBank's Son, several people familiar with the matter said.

Cadre declined to comment on the contents of its SoftBank pitch. The company has made progress with its technology, Williams told Bloomberg News in a September interview at the company's offices. For example, he said, Cadre has enhanced its marketplace to allow investors to trade property stakes. In theory, if that secondary sales platform grew large enough to meet regulatory requirements for a liquid market, ordinary investors might be allowed to trade on the Cadre platform.

The company has also started a project called Keystone to organize data in the way the company pitched to SoftBank. Williams said he believes Cadre will eventually be able to expand into other alternative asset classes, including infrastructure and energy.

"You learn, you pivot, you make quick decisions about what's working and what's not working," Williams said. "We're not here promising we're building crazy machine-learning models or predictive analytics that are going to replace the need for humans."

Cadre has good reason to position itself as a cutting-edge technology provider rather than a more pedestrian buyer of real estate. Investors eager to bet on a disruptive force have valued property technology firms like Cadre and the brokerage Compass at multiples of their revenue. Cadre's last funding round, in 2017, valued it at $800 million, even though it had bought stakes in only a handful of properties worth far less. Traditional real estate firms are generally valued at a small fraction of the assets they oversee.

Newfangled real estate firms have lost some of their shine lately. WeWork's valuation has collapsed to about $8 billion, down from $47 billion just months ago, after a canceled initial public offering and a $9.5 billion rescue package from SoftBank. Compass, another firm backed by SoftBank that promises to pair technology with residential real estate brokers, has faced questions about whether its technology is game-changing.

From Cadre, SoftBank wanted a significant stake that would have doubled the company's valuation to $2 billion or more, according to people familiar with the matter.

- - -

Williams says the idea for Cadre came after he realized that small investors had limited options for buying real estate: They could either plow money into their own residence or buy shares in broad-based real estate investment trusts. Why couldn't investors instead buy slivers of several properties the way they could buy shares in companies? He wanted to "democratize" access to the asset class.

Since then, Cadre has teamed up with developers and landlords to buy stakes in properties across the U.S. - more than two dozen multifamily, hotel and office properties from Maryland to Texas to California. The aim is to be highly selective about deals, using metrics including rent growth and rent affordability, to generate outsize returns for clients.

In September, Cadre said it sold stakes in suburban apartment complexes outside Chicago and Atlanta for an internalized rate of return exceeding 20 percent. "It has been exciting to see the concept we envisioned proved out," Williams said, "and to show our investors that we honor the trust they are placing in us.'"

Cadre's aspiration to offer sophisticated real estate investments to the masses is limited, for now, by regulations concerning investments sold privately. As a result, Cadre's customer base is made up of institutions and high-net-worth individuals. Many of those wealthy clients are overseas.

About 20 percent of Cadre's funds come from outside the U.S., the company says. The company's international clientele is mostly wealthy individuals and family offices, as opposed to institutions, according to Williams.

"We haven't done a ton of international marketing," he said. "It's a testament to the brand awareness."

- - -

As the SoftBank courtship made clear, Cadre's interactions with foreign investors could make for particularly messy optics because of Jared Kushner's hefty foreign-policy portfolio in the White House.

Almost half of the Vision Fund's money comes from the government of Saudi Arabia, where Kushner has developed deep diplomatic ties. Kushner's Saudi forays included an all-night desert meeting in October 2017 with the crown prince, Mohammed bin Salman, about a year before the journalist Jamal Khashoggi was murdered at a Saudi consulate in Istanbul.

Critics saw any SoftBank infusion in Cadre as a possible way for Saudi Arabia to curry favor with the Trump administration by enriching Kushner.

Kushner's lawyers have long said he follows all ethics rules.

As he joined the White House, Kushner transferred stakes in dozens of other assets to close family. Cadre was an exception, two friends explained, because Kushner sees it as a once-in-a-lifetime opportunity, with great potential for gains. Kushner's stake was recently valued at as much as $50 million, according to a federal financial disclosure.

Cadre executives including Mike Fascitelli, the former CEO of Vornado Real Estate who oversees Cadre's investment committee, were disappointed that Kushner's involvement in the company had caused the missed opportunity, according to a person familiar with the deal talks.

Williams' exasperation over the Kushner scrutiny bubbled over in a February cover story in Forbes magazine. "Jared is a passive investor who has no operational control," he told the magazine, adding that "I can't force anybody, really, to sell their equity."

Without the Kushners, there would be no Cadre. The young firm tapped capital from the Kushner family and executives of Kushner Cos. (The overall size of those investments hasn't been disclosed.)

Cadre is housed in the 19th-century Puck Building, among the Kushners' prized assets. Two floors up are the offices of Thrive Capital, the venture capital firm of Josh Kushner, who continues to advise Cadre. Cadre's first two investments came as part of Kushner Cos. deals for apartments in Queens and suburban New Jersey, giving the start-up early viability.

Now, Williams is trying to create distance between Cadre and Kushner Cos., people familiar with the matter say. Earlier this year, the Kushners bought a $1 billion portfolio of apartments in Maryland and Virginia, their biggest purchase in a decade. As with most of their acquisitions, they needed outside investors to complete the deal.

Executives from Kushner Cos. approached Cadre about the prospect, putting Williams and other executives in the awkward position of having to decline, according to a person familiar with the talks. The size of the deal and the Kushner connection were both factors, the person said.

The person close to Cadre said it was never approached with those investments.

Kushner Cos. didn't respond to a request for comment. A spokesman for Williams declined to comment on the Kushner Cos. decision.

Although SoftBank took a pass, several name-brand investors have shown confidence in Cadre. George Soros and Andrew Farkas have backed the firm, along with major Silicon Valley firms including Khosla Ventures and Andreessen Horowitz. Goldman Sachs Group Inc. has invested its clients' money using the Cadre platform.

- - -

Williams, a 31-year-old fitness devotee, had a short resume with similar blue-chip names when he began the company. After a stint at Goldman Sachs, he moved to the Blackstone Group as an analyst in its real estate division.

There's been some friction between Williams and Blackstone since his departure in 2014. Several of his former colleagues say he has at times overstated his role and accomplishments at the firm.

Williams has said, for example, that he played a central role in the launch of a single-family home-rental business at Blackstone. A Cadre press statement also credited him with acquiring a $550 million hotel while at Blackstone, despite his relatively junior role.

After he poached about a half dozen Blackstone employees to join him at Cadre, Williams was summoned to a meeting at Blackstone's Park Avenue offices with Jon Gray, the billionaire heir apparent to the Blackstone CEO job who was then leading its real estate arm.

When asked about the April 2016 meeting, a Blackstone spokesman, Matthew Anderson, said that the firm wouldn't discuss private talks but that it "was an entirely cordial and pleasant conversation."

A video from a Google conference last year in which Williams talked about his decision to start Cadre caught the attention of a Blackstone-aligned person.

"When I told Blackstone what I was doing," Williams says in the video, "I'd just been promoted, they gave me this quick, accelerated path to partner and told me they'd let me go to Europe and help with the debt business out there."

Two people familiar with his role said Williams hadn't been told he'd be promoted to partner. Through a spokesman, Williams declined to comment on those assertions.

Cadre has also been hobbled by departures from its senior executive ranks. The team, known internally as "Tagma," a Greek term used to describe an infantry battalion, recently lost several top staff including investment leaders and the head of human resources. The company has been searching for a chief investment officer for over a year.

Just before the Tagma team pitched the Vision Fund, its chief technology officer, Jean Sini, left the company. Several people said Cadre's lack of technology progress frustrated Sini, an alumnus of Intuit Inc. and Oracle Corp. Sini declined to comment.

The company's technology efforts are now focused on automation and analysis of data about its own properties, with the hope that this could yield investing insights in the future.

The big question for investors and potential partners is whether Cadre is merely a tech-enabled real estate company or a game-changer.

"You can hire as many developers as you want," said David Friedman, CEO of a property tech start-up known as Knox Financial that doesn't compete directly with Cadre. He declined to speak specifically about Cadre. "But if your tech doesn't deliver a new way of doing business that's measurably more profitable, then you're not a tech company."

Cadre's website alternates between describing what it can do now and where it hopes to go. "We acquire and aggregate data, create algorithms that use machine learning and statistics to derive insights, and visualize findings," one page reads.

It has also posted jobs for engineers who can help the company crunch data the way it wants. The ideal candidate? Someone who's "driven to solve hard problems in novel, elegant ways."

--

Bloomberg's Stephanie Baker and David Ingold contributed.