Disclaimers
Last Updated 9/5/25
Confidentiality
- The content of our site is confidential and intended for the recipient specified in this message only.
- It is strictly forbidden to share any part of this message with any third party without the written consent of the issuer.
- No material is intended as tax, legal, or investment advice, and nothing herein should be construed as an offer of securities or solicitation of investment.
Seller Representations
- Any illustrations, metrics, or data are illustrative only.
- While data is believed to be correct and accurate at time of publication to the best of our actual knowledge, all projections are for educational purposes only and subject to change.
- Custom makes no representation or warranty as to the accuracy of assumptions, financial outcomes, or performance.
Total Returns
- In our 5 to 10-year summary presentations we show three (3) components of return performance: (1) Cash Flow; (2) Debt Amortization (i.e., Debt Paydown); and (3) Price Appreciation.
- These figures are illustrative only and not guarantees of future performance.
- Actual results will vary materially depending on tenant performance, market conditions, financing terms, and other factors.
- The sum of Cash Flow, Debt Amortization, and Price Appreciation divided by the cash required to close (net of any junior equity or debt contributions) results in the Total Equity Return expressed as a multiple (e.g., $1M growing to $2M = 2.0x).
- The Average Annual Return is dividing this multiple by the holding period and expressing it as a percentage (e.g., 2.0/5 = 40%).
- This is more properly described as the Average Annual Total Nominal Return.
- Other methods could use annual compounding and/or adjust for inflation (real vs. nominal).
- Different investors may prefer different metrics, but no metric should be relied upon exclusively.
Internal Rate of Return (IRR)
Technical Definition: The Average Annual Return is different than the Internal Rate of Return (IRR). IRR is the discount rate that makes the net present value (NPV) of all future cash flows from an investment equal to zero — the rate at which present value of cash inflows equals the present value of cash outflows.
Plain-English Definition: IRR is the annualized percentage return an investment is expected to generate, considering both ongoing cash flows (rental income or distributions) and exit proceeds (sale or refinance). It expresses the overall yield of an investment across its entire life, assuming reinvestment of interim cash flows at the same rate.
Example: Invest $1,000,000 today. Receive $200,000 per year for 5 years, plus $1,000,000 back at exit. The IRR is the single annualized rate that equates those inflows with the original outflow (≈14.5%).
Different investors may find IRR or Average Annual Return easier to interpret, but neither metric should be relied upon exclusively, and, when provided, are for illustrative purposes only. Past performance is not indicative of future results.
Depreciation
- We do not advise investors on active vs. passive depreciation deductions, material participation rules, future regulatory changes, or how Cost Segregation Studies reduce taxable income for any individual investor.
- Investors and their advisors may refer to the IRS Audit Technique Guide related to Cost Segregation and IRS Publication 925.
- We ask each investor to consult their own CPA or tax advisor. We are ready, willing, and able to participate on such calls and welcome all outside advisors.
Assumption Details
- Assumptions contained in this site or any sales or marketing materials are based on conditions believed reasonable when made.
- They are subject to change at any time without notice.
- Nothing on this page should be relied on as a promise, guarantee, or prediction of specific outcomes.
Investor Type
- All investments are limited to Accredited Investors only, as defined under Regulation D of the Securities Act of 1933.
- Accreditation must be verified prior to investment participation.
- Non-accredited investors may not rely on any material on this page as an offer or solicitation.
Custom Capital℠ Representations & Warranties
- Custom makes no representation, warranty, or guarantee — express or implied — regarding the accuracy, reliability, or completeness of information, assumptions, or outcomes.
- Nothing herein should be construed as fiduciary advice.
Additional Information
- For additional information, please refer to our Service Terms, Privacy Policy, and Accessibility pages.
- All disputes are subject to binding arbitration and class-action waiver provisions as set forth in our Service Terms.
Key Accessibility Commitments
Commercial Real Estate Investing Risks
Every investment involves a certain amount of risk.
There are general sources of risk that influence all assets, as well as risks specific to real estate, and specifically commercial real estate.
Investors must carefully review all risks and perform independent due diligence with their own financial, tax, and legal advisors before making investment decisions.Asset Manager Risk
The performance of an investment may be negatively impacted by the decisions, strategies, or potential conflicts of interest of the asset manager, and investors bear all such risks.Audit Risk
Investments may be subject to financial, tax, or regulatory audits, and adverse findings or disputes arising from such audits may result in unexpected costs, delays, or liabilities, all of which are borne solely by the investor.Cap-ex Risk
Unexpected capital expenditure requirements for repairs, replacements, or upgrades may materially increase costs, reduce cash flow, or lower returns, and investors bear all such risks.Construction Risk
New construction or new or re-tenant improvements may introduce cost overruns, delays, or unexpected liabilities.Credit / Default Risk
Credit risk or default risk is the risk that tenants or borrowers may fail to meet financial obligations.Currency Exchange Risk
For international or cross-border holdings, changes in currency exchange rates or foreign laws may materially impact performance.Cyclical Risk
Real estate markets are cyclical, and downturns or recessions may materially reduce cash flow, asset values, and liquidity, and investors bear all such risks.Demographic Risk
Changes in population growth, income levels, or consumer behavior may reduce tenant demand and property performance, and investors bear all such risks.Environmental Risk
Properties may carry risks from environmental conditions, contamination, or regulatory compliance requirements.Exit Timing / Valuation Risk
The eventual sale price of an asset may be materially lower than projected due to market conditions, appraisal changes, or lack of buyers at the time of exit.Force Majeure / Catastrophic Event Risk
Natural disasters, pandemics, terrorism, war, or other catastrophic events may disrupt operations, reduce cash flow, and impair values.Inflation Risk
Inflation reduces purchasing power and may erode property values.Insurance Risk
Certain events (flood, earthquake, terrorism, pandemics) may be excluded from insurance coverage or inadequately insured, resulting in losses not reimbursed by insurance.Interest Rate Risk
Rising interest rates may reduce property values, refinancing options, and liquidity.Joint Venture / Partner Risk
Co-investment structures or partnerships may expose investors to risks from partner decisions, conflicts of interest, or financial distress of partners.Legislative / Regulatory Risk
Changes in law or regulation (zoning, tax law, securities law, environmental law) may materially impact investment performance.Lender Risk
Financing terms, lender performance, or lender enforcement actions (including foreclosure or refusal to refinance) may materially affect investment outcomes, and investors bear all such risks.Liquidity Risk
- Distributions from an investment over time are not the same as the proceeds from a sale or cash-out refinancing transaction.
- No public market exists for commercial real estate.
Local Market Supply & Demand Risk
Property market values are tied to supply & demand in local and comparable markets.Location Risk
Property performance depends on the quality and resilience of its location.Macroeconomic Risk
Macroeconomic factors (recessions, liquidity crises, systemic shocks, global events such as COVID-19) can reduce or eliminate property cash flows and values.Property Management Risk
- Property performance may be negatively impacted by ineffective or incompetent property and/or asset management.
- Custom does not guarantee results from 3rd-party property and asset management services and strongly encourages investors to perform independent diligence.
Reinvestment Risk
Cash distributions may not be reinvested at comparable rates of return, reducing overall portfolio performance.Title / Legal Defect Risk
Title defects, easements, liens, or boundary disputes may affect property use or ownership rights, and resolving such issues can be costly and time-consuming.Vacancy Risk
Periods of tenant vacancy may reduce or eliminate cash flow, increase carrying costs, and negatively impact property value, and investors bear all such risks.Zoning Risk
Changes in zoning laws or land use restrictions may limit property use, reduce value, or impair investment performance.
Closing Acknowledgement
By participating, you acknowledge that you:
- Understand these investments are speculative, high-risk, and illiquid.
- Have not relied on promises of guaranteed returns, liquidity, or tax benefits.
- Will consult your own financial, legal, and tax advisors.
