Delaware Statutory Trusts (DSTs) organized to hold a commercial real estate property investment (or portfolio) and non-public Real Estate Investment Trusts (REITs) represent a special category of returns risk to the market and require an underwriting and due diligence approach that cannot end at the close of escrow. 1031 exchange commercial real estate investments organized as Delaware Statutory Trusts require the investor to keep that investment for 10 long years to avoid capital gains taxes.
Ten long years…
In today’s hyper-drive technology and information economy ten years might as well be called forever. In a healthy market economy people, businesses and units of government all act in their own self-interest first, as a rule – and this rule cannot and will not be broken. Market economies harness this fundamental fact of life to create new market opportunities based upon information known about the purchasing preferences of consumers. Businesses seek opportunities to solve a problem or serve a need and earn money for doing so. That is what causes innovation and innovation is the source of market risk. Market risk results in new and different kinds of competition that have the impact of reducing the sales of existing businesses because consumers choose to use or buy the new product or service over the old. When this reaches the level of becoming a wholesale change in the market, asset obsolescence sets in and investors start losing money and businesses start heading for extinction that cannot adapt because of the disruption of the market by the technological innovations being introduced.
In today’s world, we find ourselves in the predicament of knowing that access to information is the most important tool and that access can be nearly instantaneous, while a hundred years ago it could take months or years for that information to be obtained. The result is a dramatic narrowing of the information gap and that means the commercial real estate assets you buy today are only going to be more and more exposed to changing market conditions over time, and those changes have to be carefully monitored or you have to face the reality that your investment may be out of control.
FINRA Regulatory Notice 10-22 makes it really clear the government wants the CRE finance industry to clean up the property due diligence processes attending CRE securities private placement offerings pursuant to the Direct Participation Program. NNN property due diligence requires more of us now than just verifying the lease and making a guess about subjective measures such as “tenant quality”. Sears, ToysRUs, Caldor – the list goes way back in time and yet the losses have continued. 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 was purposely built to provide underwriting and due diligence reviews with one singular goal in mind: preventing future loss on capital investment made today.
To understand the INVIZEN value proposition is to understand the basic processes that attend the underwriting goal of using independent information to determine the value of an income-producing business asset. INVIZEN automates these processes so the cost of underwriting drops dramatically and the speed of processing increases dramatically as well. The underwriting happens in real-time and that means we can give CRE NNN property investors the luxury of future investment performance assurance by re-underwriting the transaction each and every month of the investment holding period to give you up to 24 months of advance notice of changes in the market, the asset or operations that may have an impact on the future income-generating capacity of the market, property and site. These notices can be both good and bad. INVIZEN has artificial intelligence at its core and computers don’t care if you have trash, it will still be another man’s treasure.
INVIZEN offers DST commercial real estate investors, lenders, broker-dealers, registered investment advisors, asset managers, sponsors, developers and operators a saner path forward based upon our amazing technological advance that provides proactive, real-time forecasting and comprehensive re-underwriting each and every month of the investment holding period to maximize the opportunity for investment performance assurance. Only INVIZEN offers this unique end-to-end solution that looks at what is likely to happen on an ongoing operating basis in order to determine what needs to happen both before the money changes hands and afterwards. INVIZEN offers the affordable solution that has the potential of changing the way commercial real estate private placement offerings of securities are undertaken and the way the industry operates.
There 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 by talking to an INVIZEN representative today at 832.663.9634.