The Increased Role of Due Diligence During COVID-19
Written by Nathan Kuhn June 8, 2020
In times of increased risk and uncertainty, it’s smart for a business to put an even sharper focus on its core competencies. At Chicagoland 1031 Exchange, we put the protection of our client’s interests first rather than simply approving every replacement property offering available on the market. If you’re a new client sitting down with us to explore your exchange options, you can be sure that any property we’re showing you has been vetted on a number of different levels. We truly pride ourselves on the amount of due diligence that goes into choosing the Delaware Statutory Trusts (DSTs) that make it onto our platform.
In our current environment with the COVID-19 pandemic affecting all aspects of the economy, a sharp focus on due diligence is more important than ever. Here are some of the actions we’ve taken:
- We’ve removed DSTs in the hospitality space from our platform altogether. Earlier this year, we had a number of different hospitality investment opportunities available—which made sense in a pre-COVID environment. For the time being, there’s simply too much uncertainty in the industry for us to feel comfortable guiding our clients into these deals.
- We have asked for and are receiving frequent updates directly from our multi-family and self-storage sponsors. We regularly receive current information on occupancy rates and trends, as well as rent collection. This provides a direct window into how these properties are managing their way through the pandemic with near real-time data.
We recognize that COVID’s impact may not be over, but so far the data we’re seeing is encouraging. Most of the DSTs that remain on our platform are sustaining strong occupancy with an ability to maintain rent collections at a high level. Just as it has before, due diligence will continue to remain a strong focus for us as we navigate this pandemic together.
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Chicagoland 1031 Exchange proudly serves clients nationwide, including California, Illinois, Florida, Colorado, Massachusetts, and more.
The information herein has been prepared for educational purposes only and does not constitute an offer to purchase or sell securitized real estate investments. Such offers are only made through the sponsors Private Placement Memorandum (PPM) which is solely available to accredited investors and accredited entities. DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last two years, and reasonably expects the same for the current year) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney. There are risks associated with investing in real estate and Delaware Statutory Trust (DST) properties including, but not limited to, loss of entire investment principal, declining market values, tenant vacancies and illiquidity. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Because investor’s situations and objectives vary this information is not intended to indicate suitability for any particular investor. This material is not to be interpreted as tax or legal advice. Please speak with your own tax and legal advisors for advice/guidance regarding your particular situation.
This site is published for residents of the United States only. Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all services referenced on this site are available in every state and through every advisor listed. For additional information, please contact Nathan Kuhn at 224-245-5281.
Chicagoland 1031 Exchange does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstances.
Securities offered through DAI Securities, LLC, member FINRA / SIPC. Advisory services offered through Kuhn Wealth Management, Inc. (KWM), a state registered investment advisor. Insurance offered through DAI Securities, LLC. KWM dba Chicagoland 1031 Exchange is independent of DAI Securities, LLC.
