DSTs and other 1031 exchange investments offer a unique set of opportunities and a special level of investment loss severity risk potential for the investing-public. DST investments require a 10-year holding period and that just about guarantees the investor will be exposed to significant loss potential due to market disruptions that could create a bankruptcy filing or an administrative default event that could lead to a foreclosure – then there’s the transparency issue as many DST sponsors are vertically-integrated. Vertically-integrated sponsors have multiple potential conflicts-of-interest with the beneficiaries as they can make money whether the investor does or not. And finally, the broker-dealers and registered investment advisors seek to sell the private placement offering securities in these commercial real estate property businesses to whoever they can – and that includes investors who are not seeking capital gains protection as well as those who are seeking to shelter capital gains. That’s a whole lot of potential conflicts-of-interest and risks that can and do spell trouble. That means you must have proactive risk mitigation or be made to suffer.
INVIZEN offers the first end-to-end solution that is specifically designed to help address and put an end to these problems because the INVIZEN Real-Time Status (RTS) Asset Care Protection Program is a proactive, real-time technology solution that:
- Helps provide transparency at all levels that is monitored each and every month of the entire investment holding period; and
- Helps prevent liquidity crises that could end in a bankruptcy petition by providing up to 24 months of advance notice of market disruption events that may have an impact on property operations so that the asset can be re-positioned, re-developed or sold off in an orderly fashion to avoid materially-significant investment losses; and
- Helps provide protection against administrative default events that would otherwise lead to a foreclosure with a proactive execution risk management and mitigation program; and
- Helps provide opportunity maximization by providing notice of profit-taking opportunities when things work out better than planned (not an issue in a 1031 exchange, but still a great benefit for everyone else!).
Whether it is market opportunity risk, asset obsolescence risk, liquidity risk, yield maintenance risk, distribution payment risk, execution risk or a host of other subjective financial investment risks, INVIZEN provides an affordable service that you don’t have to go without because the cost of service is not even materially-significant compared to the value of the asset and future cash flows of what we accept. If your sponsor doesn’t want to provide INVIZEN support you have to ask yourself why that is and what it means for your risk appetite. In today’s new CRE investment climate, there are risks we don’t have to accept as a condition of investment, and there are risks we don’t have to accept as a condition of staying in a transaction. The key is knowing when to stand up and decide to do something about it before the potential for a train wreck ends up being baked into the deal.
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
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
If you have questions please feel free to contact us at 832.663.9634.