CRE Net Lease 1031 Exchange Property Due Diligence for Private Placement Offerings

For prospective investors and lenders considering Commercial Real Estate (CRE) Net Lease 1031 Exchange properties, the calculation of loss exposure based upon LGD, PD and/or EAD machinations can’t be the due diligence answer any more.  CRE 1031-exchange net lease transaction due diligenceThe reality is that we have to acknowledge that reactive approaches to commercial real estate due diligence and managing investment loss severity risk are all largely impacted by technology risk – the key element to market risk that has the potential for making CRE net lease and other 1031 exchange properties potentially very risky investments for investors seeking capital gains.  1031 exchanges come with a mandatory 10-year holding period for a given CRE net lease or other CRE income-producing property.  In today’s technology-driven economy the speed of technology advances only increase.  The bottom line is that it is very likely the typical CRE net lease transaction comes with the realization there will likely be multiple market disruption events happen in that 10-year time period that could cause a materially-significant amount of investment loss.  These events are the major source of CRE net lease transaction investment loss investment fraud claims that have become a routine headache to the CRE finance industry in general, and the broker-private placement offeringsdealer vertical in particular.

Due diligence requires us to not only understand the issue is the most important issue that needs to be resolved in underwriting, but also provide the means of managing this risk for the purposes of future profit-taking and not loss-taking activities.  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?

INVIZEN offers the only end-to-end solution that is designed to serve both the pre-funding due diligence and underwriting review processes, but also the post-funding environment where monitoring, execution risk mitigation, bankruptcy mitigation and foreclosure risk mitigation issues have to be proactively managed to protect the interests of all of the parties.  This affordable, real-time solution is designed to help not only manage the risk exposure of the parties, but also provide alternative means of loss resolution opportunities before the the losses become significant.  Only INVIZEN offers this systemic approach because the operating principle of INVIZEN is to provide a new underwriting analysis and due diligence review on the given property’s operations each and every month of the holding period.  This gives the opportunity to provide up to 24 months of advance notice of pending market disruption events and other market issues that could eventually become real problems.  This proactive approach of doing something before the train wreck helps all of the parties manage the capital loss risk in a proactive way to create a win-win outcome.

RTAF Summary Report Screen ShotThere is so much more to the INVIZEN Real-Time Status Asset Care Protection Program that INVIZEN was intentionally designed to support:

  • CRE Developers & Sponsors.  Developers and sponsors seeking capital financing have the advantage of a systemic solution that provides the support needed to increase the odds of a successful capital financing outcome that saves time, money and reduces their capital investment risk.
  • Investors & Lenders.  Investors and lenders seeking to participate in commercial real estate securities private placement offerings and other credit instruments have the advantage of a systemic solution that provides the highest practical investment performance assurance we can contrive.  INVIZEN gives investors and lenders the proactive investment loss severity risk prevention and monitoring they really need, but have never been able to obtain in the past.
  • Broker-Dealers & Registered Investment Advisors.  Securities broker-dealers and registered investment advisors on both the buy-side and sell-side of the transaction have the advantage of a reporting system that provides FINRA compliance support, protection from future investment fraud claims, increased transaction velocity and the opportunity to increase their operating margins – all in one package.  If your firm doesn’t have this approach, then you are still operating in an environment that will penalize your opportunity to profit and control costs.

Talk to an INVIZEN representative today for more info

Find out more about what we can do for your property, portfolio, loans or investment vehicles by contacting an INVIZEN representative today at 832.663.9634.