DST commercial real estate private placement offerings (and other 1031 exchange structures) place a heavy burden on due diligence. DST due diligence reviews and underwriting analyses that focus only on the issues at the time of funding are a thing of the past. They just won’t do. In today’s world, the need is for real-time, proactive due diligence that goes beyond the funding event to manage investment loss severity risk that accompanies commercial real estate investments for the full term. The focus is on the DST financial due diligence disclosure outcome and the issues that play into that disclosure requirement.
Whether you are a developer, sponsor, promoter, investor, lender, broker-dealer, registered investment advisor, owner/operator or other key commercial real estate participant, the due diligence burden on commercial real estate private placement offerings has become increasingly burdensome and complex. FINRA, buy-side broker-dealers and liability insurance carriers are particularly exposed to future loss risk due to investment fraud claims stemming from a lack of due diligence disclosures. Rainmaker Analytics is listed in the FINRA Compliance Vendor Directory and our firm takes things up to a whole new level for complex securities private placement offerings for the CRE and alternative investment verticals.
Failure to observe proper due diligence procedures is fraught with danger. The result has been telling: a restriction has been placed on capital financing access for commercial real estate ADC projects and commercial real estate private placement offerings are becoming even riskier as a result. The INVIZEN approach applies to both the buy-side (those seeking capital financing and underwriting the requests) and the sell-side (those investing capital and underwriting the requests) of the commercial real estate private placement offerings spectrum including multifamily housing, senior housing, commercial office, light industrial, NNN single-tenant, retail, mixed-use, hospitality and other property types. The INVIZEN solution combines the following key benefits that are certain to be discussion topics regarding every DST due diligence review:
- Ongoing due diligence documentation for the full term of the investment holding period.
- Advance warnings of market events that could lead to investment losses; and
- Mitigation program options to prevent potential future loss events from becoming potential future loss realities. 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? and
- Reduction in liability insurance costs due to reducing the potential for investment fraud claims; and
- Increased access to market opportunities to participate in more DST transactions on the sell-side or buy-side.
INVIZEN offers broker-dealers and registered investment advisors a unique suite of proactive, real-time due diligence and investment loss prevention services for DST investment sponsor due diligence and investment performance assurance over the full 10-year holding period. Protecting the interests of beneficiaries, addressing the concerns of regulators and insurance carriers, protecting the investment opportunity and helping prevent DST investment disasters are part and parcel to the core functions of the INVIZEN Real-Time Status (RTS) Asset Care Protection Program.
RTS is an end-to-end solution that operates in a systemic, proactive manner within the real-time envelope to underwrite commercial real estate property business securities private placement offerings and then provide ongoing monitoring to help prevent investment non-performance for the entire term of the holding period. DST sponsors frequently have vertically-integrated operating businesses, so the DST offering comes with a host of conflicts-of-interest that are a real headache if something goes wrong and the claims of investment fraud start getting thrown around. INVIZEN helps end this problem by providing the following key service tenets:
- Compliance with the requirements and spirit of FINRA Rule 2310, SEC Regulation D , Basel III guidance on HVCRE loans and Section 941 of Dodd-Frank Wall Street Reform Act regarding pre-closing due diligence investigations and ongoing due diligence compliance for commercial real estate transactions.
- Proactive protection against bankruptcy petitions resulting from unforeseen liquidity crises via up to 24 months of advance notice of potential market disruptions that could impact the property’s revenue capture opportunity and create asset impairment.
- Monitoring of administrative foreclosure default event issues that could create an administrative default.
- Market forecasting to identify profit-taking trends as a result of adaptive use changes that would allow the triggering of the Springing, LLC mechanism to be a potential profit-taking event instead of final outcome to a property failure.
All of this is affordable (check our pricing and see for yourself) because the cost of service is not even materially-significant compared to the asset value and earnings potential of every asset accepted for our subscription service. You need to find out more and have the opportunity to have peace-of-mind and greater control. Start taking control of your future with a call to INVIZEN today at 832.663.9634