Conflicts-of-Interest Dispute Resolution for DSTs & Other 1031 Exchange Investments

Nobody likes conflicts-of-interest and Delaware Statutory Trust (DST) investment sponsors frequently wear multiple hats in these transactions that give everyone heartburn.  INVIZEN offers a conflicts-of-interest dispute resolution program for DSTs and other 1031 exchange investment vehicles for commercial real estate property businesses and alternative investments.  The most common conflicts-of-interest in DST private placement offerings are due to the fact the sponsor is a vertically-integrated company that may provide asset management services, property management services, development management services, etc.  The cost of these services is paid whether the DST beneficiary investor makes any money or not and that is the definition of a conflict-of-interest.  There is nothing, in particular, wrong with the sponsor using this approach for their business, but it does raise concerns about keeping things on the up-and-up.

That’s where INVIZEN steps in and provides resolution and a whole lot more.

The INVIZEN Real-Time Status (or RTS) Asset Care Protection Program is designed to deliver opportunities for managing these conflicts-of-interest and a whole lot more.  Her are just some of the benefits the RTS may provide for the benefit of the sponsor, issuer, lender, investor, property manager and regulator:

  • Real-time monitoring of fees paid to affiliated parties to help ensure these fees are consistent with contractual requirements and the disclosures in the original private placement offering for the securities; and
  • Real-time prevention of potential bankruptcy, foreclosure and investment non-performance of a CRE property business for the entire term of the investment holding period; and
  • Real-time default risk underwriting reviews each month of the investment holding period to help ensure the most common administrative foreclosure default event risks are eliminated from impacting the investment’s performance expectations; and
  • Real-time valuation, feasibility and underwriting reviews to help ensure the future income stream opportunity is maximized for the benefit of all of the parties; and
  • Identification of profit-taking opportunities for the benefit of all of the parties over the course of the investment holding period; and
  • Cost efficiency (click on the pricing tab above) for our service.  If the sponsor says they cannot afford this service, then it is virtually certain the investment is an extremely high-risk investment that should be rejected by underwriting to begin with.  The ongoing cost of monitoring is so low that it is not even considered to be materially-significant, so if the sponsor says they don’t want it, then you have to ask yourself whether or not your peace-of-mind is really something they care about, as well as reporting transparency.

Find out more about this amazing service and technology by talking to an INVIZEN representative today at 832.663.9634.