Commercial real estate sponsors are pushing record levels of NNN 1031 exchange properties through non publicly-traded real estate investment trusts as alternative investments that offer tax advantages and capital gains. The most common investment vehicle is a Delaware Statutory Trust (DST) that holds multiple properties and is available as an equity investment opportunity pursuant to a private placement offering. NNN 1031 exchange properties represent a special class of risk – ask anyone who was a late investor in NNN leases for Sears, ToysRUs or Brookstone. NNN 1031 exchange properties are a special class of investment risk because tax regulations require a 10-year holding period. Think of everything that has happened in our economy in the last 10 years and ask yourself if you really believe things will stay the same, change slightly or have the propensity to change a whole heck of a lot because we live in the new Information Age and technology advances come to market so fast. Technology advances and other innovations have the power to cause potentially powerful market disruptions within the local trade area of a variety of CRE property classes. That spells potential problems.
INVIZEN offers the NNN 1031 exchange industry a proactive, real-time solution that provides the only end-to-end program approach that is specifically designed to allow sponsors, lenders, investors, trust managers and asset managers the opportunity to control their exposure to this fundamental market risk in an affordable manner. The key benefits of this program are:
- Very low cost (check our pricing tab). For example: a $15 million property would cost less than 1.5% of the property value over a 10-year subscription period to support ($25,000 enrollment fee, plus $1,500 per month ongoing monitoring fee for a total of $205,000 paid over the 10-year period which equals a total cost of 1.366%).
- Up to 24 months of advance notice of a pending market disruption event that could impair the future income-generating opportunity of the asset. This provides the opportunity for both prevention and proactive investment loss risk mitigation programming that INVIZEN also exclusively supports.
- Proactive execution risk exposure management and mitigation to help keep the operating and marketing programs on track, on budget, on schedule and give lenders and investors accountability they are owed. 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?
- Proactive term default risk, maturity default risk and technical default risk exposure management. This is the key advantage of the INVIZEN RTS approach that cannot otherwise be found in the market today on an end-to-end solution basis.
- Reduced due diligence processing time and costs. Processing time can be cut to a day or two from an average of weeks or months. The savings potential is enormous.
- Enhanced liquidity protection for marginal (i.e.: expensive) transactions.
- Enhanced transaction negotiations abilities due to the system’s intuitive design for protection against common bankruptcy and foreclosure loss events.
Find out more by talking to an INVIZEN representative today at 832.663.9634.