The Critical Role of Due Diligence
In the fast-paced world of real estate private equity, success hinges on a careful balance between risk and reward.

At Larson Capital Management (LCM), our commitment to rigorous due diligence is the backbone of our investment strategy. With over $6B in assets under management and a diverse portfolio spanning office, industrial, and multifamily properties, we understand that thorough evaluation is not just a best practice: it’s non-negotiable.

Why Due Diligence Matters

Investing in real estate private equity involves high stakes. While the potential for strong price appreciation and income generation is significant, the risks (ranging from illiquidity to market volatility and regulatory challenges) are equally formidable.

Due diligence is our way of minimizing these risks to make sure every investment meets our exacting standards. It provides a systematic framework to uncover financial, operational, legal, and market-related red flags long before capital is committed. This process is critical when managing large sums of money, helping drive long-term stability for our investors.

Key Areas of Our Due Diligence Process

Legal and Regulatory Compliance
Real estate investments come with a host of legal obligations. Our team rigorously verifies property titles, zoning regulations, permits, and tenant laws, while also evaluating environmental compliance. We scrutinize contracts and assess potential litigation risks to safeguard against any hidden legal liabilities. This diligence is essential. Even minor oversights in zoning or permits can lead to significant complications down the line.

Operational Due Diligence
Success in real estate isn’t determined by bricks and mortar alone; it’s driven by effective management. We assess the experience and track record of our management teams and partners, to certify the business model is sustainable and aligned with our investment goals. Larson Capital Management leverages decades of combined industry experience, and our commitment to best practices contributes to long-term value creation.

Market and Property-Specific Risk Assessment
Understanding market dynamics is vital. Our due diligence extends to evaluating local market conditions, geographic and sector exposure, and the competitive landscape. We factor in economic cycles that could influence property values or rental incomes. We also conduct detailed assessments of individual properties to help ensure that each investment is positioned for success. This includes examining tenant quality, physical asset conditions, and any potential repair or structural issues.

Tools, Processes, and Overcoming Challenges

Our due diligence process follows a structured methodology:

• Document Review and Financial Modeling: Every opportunity undergoes an extensive document review and financial analysis. We scrutinize both projections and historical data.
• Site Visits and Interviews: We conduct on-site inspections and speak directly with property managers and local experts to gauge operational efficiencies and market trends.
• Legal Audits: A thorough legal review is carried out to verify compliance and assess risk.
• Due Diligence Checklist: Our proprietary checklist helps assure no critical aspect is overlooked.

The challenges in this space are notable. Unlike public companies, real estate investments often lack publicly available information, compelling us to rely on proprietary research and confidential data provided by sellers. Our extensive industry relationships and disciplined processes help us navigate these hurdles effectively.

A Commitment to Excellence

Due diligence is more than a step in our process: it’s the foundation of our investment philosophy. Our disciplined approach seeks to not only minimize risks, but also maximize opportunities in a volatile market. By combining deep industry expertise with structured, methodical evaluation, we empower our investors to make informed decisions and confidently pursue high-return opportunities.

Investing with us means partnering with a team that leaves no stone unturned in the pursuit of excellence. Learn more about how our comprehensive due diligence process transforms potential challenges into strategic advantages and discover the confidence that comes with investing in rigorously vetted, high-quality real estate opportunities.

Meet our team behind the scenes.

---

Investment advisory services are provided by Larson Capital Management, LLC, an investment advisor registered with the Securities and Exchange Commission. All securities involve risk and may result in significant losses. Investing in private placements also requires long-term commitments. Risks and Limitations: the risks associated with making investment decisions based on targeted metrics is that they are targets. Commercial real estate investing is risky, and that means that the investment will not always play out according to expectations. Criteria and Assumptions: how a sponsor approaches the underwriting process (conservative, moderate, aggressive) may change the assumptions of the model which include targeted: cash yield, equity multiple, IRR, investment period and distribution rates.

For Accredited Investors Only. According to the SEC, an accredited investor, in the context of a natural person, includes anyone who earned income that exceeded $200,000 (or $300,000 together with a spouse or spousal equivalent) in each of the prior two years, and reasonably expects the same for the current year OR has a net worth over $1 million, either alone or together with a spouse or spousal equivalent (excluding the value of the person’s primary residence).