DST investments represent a special category of risk for investors seeking to shield capital gains from taxation as DST investments require a 10-year holding period. That 10-year holding period is just about guaranteed to include at least one market disruption that could lead to an investment loss and DST sponsors know this, so they have a built-in mechanism called a “Springing, LLC” that is supposed to “spring into action” when the Trustee determines things are going down the tubes.
That should tell you something really important about the investment risks and market risk exposure you are facing in a 1031 exchange investment vehicle like a DST.
The problem is that asset managers have historically waited for the proverbial “train wreck” to happen and then try to do something to keep the losses as small as they can, given the fact the deal has blown up, people are taking losses, and litigation claiming investment fraud is on the near-term horizon for the insurance carrier of the asset manager, sponsor, broker-dealer, registered investment advisor and anyone else that can be sued.
Nobody has ever thought about taking this huge lemon and making lemonade with it instead. Nobody until INVIZEN came along with the Real-Time Status (or RTS) Asset Care Protection Program that is designed to transform the springing escape mechanism into a potential profit opportunity for the benefit of all of the parties.
RTS is a systemic solution that attacks the problem with an end-to-end approach that operates in a real-time environment to give the lenders and investors what they have always wanted but been told was not possible because of the time and cost:
The luxury of having their investment re-underwritten each and every month of the entire investment holding period to not only provide the highest level of investment performance assurance possible, but to also give advance warning of potential problems that could lead to an investment failure.
INVIZEN is a proactive solution in that:
- It is designed to provide up to 24 months of advance notice of market disruptions that could cause a liquidity crisis that could end in a bankruptcy petition. This gives us plenty of time to avoid the train wreck fire-sale scenario that is common today; and
- It is designed to provide valuation and feasibility analyses in real-time so that alternative use, re-development and/or re-positioning of the property can be undertaken to avoid the crisis altogether; and
- It is designed to provide reporting on the most common administrative foreclosure default event risks to help prevent those pesky administrative foreclosures for the full term of the investment holding period.
Currently, the asset classes supported by the INVIZEN RTS program include the following commercial real estate specific intended-use scenarios:
- Multifamily Rental Class “A”
- Multifamily Rental Class “B”
- Multifamily Rental Class “C”
- Multifamily Age-Restricted Rental Senior Housing
- Multifamily Rental Independent Living Facility Senior Housing
- Multifamily Rental Assisted Living Facility Senior Housing
- Multifamily Rental Alzheimer’s Assisted Living Facility Senior Housing
- Multifamily Rental Congregate Care Senior Housing
- Multifamily Continuing Care Retirement Community (CCRC) Senior Housing
- Commercial In-Line Retail
- Commercial Single-Tenant (Retail/Commercial/Healthcare Sub-Scenarios)
- Commercial Enclosed Retail
- Commercial Mixed-Use Retail
- Commercial Office Class “A”
- Commercial Office Class “B”
- Commercial Office Class “C”
- Commercial Light Industrial Flexspace
- Commercial Distribution Facility
- Commercial Mini-Storage
- Hospitality – Resort Class
- Hospitality – Full Service Class
- Hospitality – Limited Service Class
- Hospitality – Value Class
INVIZEN does so much more so feel free to navigate our website and please check out our pricing as the cost of INVIZEN services is not even materially-significant compared to the size of the transaction, so there is no good reason not to have it – unless perhaps someone has something to hide. If you have questions please call us at 832.663.9634 to get real answers.