Property Due Diligence

Putting Your Interests First

Our personally-crafted due diligence process is an important component of the value we provide to you. We put the protection of our client’s interests first rather than simply approving every replacement property offering available on the market.

While no amount of due diligence can completely eliminate risk, we invest firm resources—time, capital, and man-hours—to ensure our process is both comprehensive and effective. In the long run, we believe this approach will serve our firm, our industry, and, most importantly, our clients well.

Our Property Due Diligence Process

Chicagoland 1031 Exchange’s due diligence is extensive. We start with the sponsors of DST offerings who hire independent, third-party due diligence firms to conduct a review of their property offerings. During this process, the third party assesses items such as operating agreements, trust agreements, and leases.

Since the third party is hired by the sponsor, they work directly with the sponsor to confirm the offering information is both complete and correct. They also compile a thorough due diligence report for the sponsor to share with the appropriate officers at broker dealers.

Our Broker Dealer

We partner with our broker dealer, DAI Securities, for many reasons, but especially for their focus and extensive knowledge on alternative investment products and their thoughtful due diligence process.

The DAI due diligence team dives deep into the investments—going beyond the marketing material and sales pitch. They examine the sponsor’s offering information as well as the information provided by the third party due diligence firm. DAI reviews a plethora of documents, including updated background reports on officers of the sponsor firm, property condition reports, location sales and leasing figures, and tenant financials. Every offering is unique and the DAI due diligence team will not approve specific offerings if they feel it does not meet their criteria.

DAI also has a rigorous sponsor due diligence process. Before any offering of a sponsor is approved, the sponsor itself is evaluated. DAI strives to work with sponsors who display integrity and a commitment to putting investors first and who have a positive performance record and solid financial stability.

The Final Step

After an offering is approved by DAI, we review marketing materials and the offering’s private placement memorandum (PPM). We use this information to evaluate the fundamentals of the offerings, assumptions being made, and the business plan for the property. Then, we compile a list of clarifying questions and work to get them answered by either DAI’s due diligence team or directly from the sponsor.

As part of our ongoing due diligence efforts, we and the DAI team regularly attend industry conferences, conduct, and attend meetings at sponsor’s offices and locally, and we also visit properties offered through DST programs.

It is impossible to eliminate all risks, but having an extensive due diligence process in place is beneficial.

To learn more or if you have any questions, please contact us today.