Investment Loss Severity Risk Reduction

Whether you are concerned about equity investment or lending investments, investment loss severity risk reduction is critical to maximizing profits and minimizing liabilities.  For commercial banks, commercial real estate loan loss severity risk directly impacts share price, lending and future profits.  For private firms, investment loss severity risk can mean the difference between endless litigation they cannot afford, potential bankruptcy and success.  That’s a pretty wide range of outcomes and only one of them is potentially good.

The INVIZEN RTS program focuses on commercial real estate investment loss severity risk management and reduction.  As the industry’s only end-to-end solution, the program functions on the basis of providing liquidity management monitoring for the purposes of preventing a bankruptcy petition from being a potential outcome to an unforeseen liquidity crisis for up to a 24-month forward-looking period for the entire term of the investment.  That’s right – RTS is there with you for the entire holding period of the investment.  For 1031 investors (principally beneficiaries in DSTs) this is particularly welcome news as their exposure is for an incredible 10-year period mandated by tax law.

Commercial real estate income-producing properties are very exposed to market disruptions and the complexity of their operations can often lead to technical defaults due to taxes not being paid, insurance not being paid, reports not being filed or financial covenants not being observed.  The INVIZEN RTS program provides monitoring for these common maladies and that helps boost performance assurance and peace-of-mind over the entire term of the investment holding period because INVIZEN collects the property information each month of the service period.

The INVIZEN RTS system is very affordable.  Here’s a set of working examples:

  • A developer seeking capital investors to fund a $15 million development property agrees to have the INVIZEN system underwrite and then monitor the asset so that the developer can maximize the opportunity to obtain commercial real estate investment capital for the project.  The developer plans to hold the asset for no more than 5 years, so the enrollment is for a 5-year subscription period.  Assuming the subscription were to go the entire 5-year period, the total cost would be $127,500.  That works out to 0.85% over the entire 5-year term.
  • A Delaware Statutory Trust (a DST) organized for 1031 exchange investors has three (3) properties each of which was acquired for $50 million.  The 1031 exchange investors have to hold the investment for 10 years, so the enrollment is for a 10-year subscription period.  Assuming the subscription were to go the entire 10-year period, the total cost (discounts all being applied) would be $1,788,750.  That works out to less than 1.2% over the entire 10-year term.

The INVIZEN RTS program is a complete end-to-end solution designed to help developers obtain capital, help investors protect capital and allow lenders to dramatically reduce their loan loss severity risk on commercial real estate income-producing properties at all phases of the property’s life cycle.  Find out more about INVIZEN RTS by talking to one of our representatives today at 832.663.9634.