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Risk Factors
Real Estate Limited Partnership Investments are subject to
risks generally incident to the ownership of real property
Real Estate Investments involves various risks and uncertainties. You should carefully consider the following risk factors in conjunction with the other information available. The risks discussed below can adversely affect operating results, prospects and financial conditions. This could cause you to lose all or part of your investment. The risks and uncertainties described below are not the only ones we face but do represent those we believe are material to our business. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also harm our business.
If you can not fully understand the risks involved it is highly recommended to seek the advice of an attorney prior to investing.
General economic risks
Adverse economic and geopolitical conditions could negatively affect returns and profitability. Poor economic times may result in tenants defaults under leases; job transfers and layoffs may increase vacancies; maintaining occupancy levels may require increased concessions or reduced rental rates; and increased insurance premiums may reduce funds available for distribution and also make it difficult to increase rents to tenants on turnover, which may adversely affect our ability to increase returns; and
There are general risks related to investment in real estate due to changes in general or local economic conditions; changes in supply of or demand for similar or competing properties in an area; changes in interest rates and availability of permanent mortgage funds which may render the sale of a property difficult or unattractive; change in tax, real estate, environmental and zoning laws; and periods of high interest rates and tight money supply.
Real estate risks
We depend on tenants for our revenue, and lease terminations could reduce the NOI
(Net Operating Income) and require us to find an alternative source of revenue to meet
mortgage payments and prevent a foreclosure if the property is subject to a mortgage.
Ability to achieve appropriate occupancy levels resulting in rental amounts sufficient to cover operating costs;
Supply of or demand for similar or competing rentable space, which may adversely impact retaining or obtaining new tenants upon lease expiration at acceptable rental amounts;
Tenant ability or willingness to satisfy obligations relating to our existing lease agreements;
Potential need to fund tenant improvements, lease-up costs, or other capital expenditures out of operating cash flow or net sale proceeds;
Increases in property operating expenses, including property taxes, insurance, and other costs not recoverable from tenants;
Ability to secure adequate insurance at reasonable and appropriate rates to avoid uninsured losses or losses in excess of insured amounts;
Discovery of previously undetected environmentally hazardous or other undetected adverse conditions;
Unexpected costs of capital expenditures related to tenant build-out projects or other unforeseen capital expenditures; and
Increases in interest rates could increase the amount of our debt
payments and adversely affect our return rates
Ability to sell a property when desirable at an acceptable return, including the ability of the purchaser to satisfy any and all closing conditions. Properties that have significant vacancies could be difficult to sell, which could diminish the return of your investment.
Other operational risks
Dependency on Orbitix, its key personnel, and its affiliates for various administrative services;
Orbitix’s ability to attract and retain high-quality personnel who can provide acceptable service levels to us and generate economies of scale for us over time;
Increases in our administrative operating expenses, including increased expenses associated with operating in the current regulatory environment;
Changes in governmental, tax, real estate, environmental, and zoning laws and regulations and the related costs of compliance;
Ability to demonstrate compliance with any governmental, tax, real estate, environmental, and zoning law or regulation in the event that any such position is questioned by the respective authority; and
Actions of our joint venture partners including potential bankruptcy, business interests differing from ours, or other actions that may adversely impact the operations of joint ventures.
There is no public trading market for your investment; therefore it will be very difficult to sell your shares before the disposition stage of the assets; Furthermore if you are able to sell your shares, you would likely have to sell them at a substantial discount from their invested price.
We have no operating history, nor do we currently own any properties. We have not identified any property or acquire with proceeds from this offering. If we are unable to find suitable real estate investments, we may not be able to achieve our investment objectives or pay dividends.
Because this is a BLIND POOL offering, you will not have the opportunity to evaluate the investment before we make them, which makes the investment more speculative.
If we raise substantially less that the offering by the offering termination date, we may not be able to invest in the proposed property; In this case we will return the original investment to the investor
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