1031-exchange commercial real estate (CRE) properties, like all businesses, present a certain level of investment risk owing to execution risk. Unlike other investments, 1031-exchange investment execution risk management cannot end with the underwriting and due diligence review that takes place prior to the money changing hands. The essence of execution risk is that it is an ongoing risk that evolves into many issues and takes many forms over time, and 1031-exchange investments require a 10-year holding period that creates huge execution risk exposure potential that must be proactively managed for the full term or investment loss severity risk will become investment loss severity reality. 1031-exchange CRE properties include everything from single-tenant retail properties all the way through the spectrum to extraordinarily operationally-intensive business operations such as senior housing and health care. INVIZEN supports the project and the participants the entire way with our exclusive suite of business planning services specifically designed to proactively manage execution risk because the budgets, goals and owner requirements are automatically updated and transmitted down to the line employee level through every level of management that includes tasking, productivity measurement and automated reporting. What does your due diligence program have?
While the common structure is the Delaware Statutory Trust (DST) vehicle that utilizes a master tenant, this provides absolutely zero protection against future investment losses due to execution risk, asset obsolescence risk, yield maintenance risk and/or investment loss severity risk. The unfortunate reality is that bankruptcy and foreclosure prevention, investment fraud and management execution risk prevention all require proactive, ongoing risk management and mitigation after the close of the escrow for the securities private placement offering and extending for the entire term to provide any appreciable level of risk management and loss mitigation.
Commercial Real Estate (CRE) investment loss mitigation has evolved due to the advances in technology provided by the INVIZEN Real-Time Status (RTS) Asset Care Protection Program that offers proactive CRE investment loss mitigation in a real-time environment that follows the property, operations and business management issues from funding all the way to the end of the investment holding period. RTS is the only end-to-end solution for investment loss mitigation that provides:
- Proactive CRE investment loss mitigation due to asset obsolescence; and
- Real-time CRE investment loss mitigation due to common forms of investment fraud; and
- Proactive CRE investment loss mitigation due to unforeseen liquidity crises that could give rise to a bankruptcy petition or foreclosure event; and
- Proactive CRE investment loss mitigation due to management execution risk; and
- Real-time CRE investment loss mitigation of market risk by providing up to 24 months advance notice of market events that could impair future asset value.
INVIZEN provides the only end-to-end solution that is specifically designed to help deal with this issue by looking more at what the future tenant should be for that specific market and then monitoring both the tenant and the market forces to provide up to 24 months of advance notice of problems before they are losses. Equally important is the prevention of investment fraud at all levels of the transaction the INVIZEN program approach requires to be observed due to our advanced VERIFY NOW fraud deterrence management and mitigation program approach that puts all parties on the record regarding their understanding of their obligations regarding contractual relationships and expectations. By combining forecasting, underwriting, ongoing monitoring, risk mitigation and reporting functions all in one platform, effective risk mitigation is the outcome on a proactive basis (and not a reactive basis).
Find out more about this amazing system by continuing to browse our website or by calling us at 832.663.9634 to learn what this could mean for your prospects.