COMMERCIAL ADVISORY GROUP
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Investment Risk

Commercial Advisory Group, powered by REAL Brokerage, LLC

Critical Investor Alert

Commercial Advisory Group, Powered by Real Brokerage, LLC (“CAG”) provides transaction brokerage services only pursuant to Florida Statute §475.278. CAG does not provide investment advice, financial planning, tax strategy, legal counsel, securities advice, or investment recommendations of any kind.

All commercial real estate investments involve significant risk, including the potential loss of the entire invested principal. Past performance does not guarantee future results. Prospective investors must consult independent Florida-licensed attorneys, CPAs, tax advisors, and financial professionals before proceeding with any transaction.

CAG’s Strictly Limited Role

CAG’s services are limited to the following:

  • Licensed transaction brokerage services only
  • No investment recommendations or return guarantees
  • No fiduciary duties beyond Florida statutory minimums
  • No liability for investment losses, market declines, or transaction outcomes

Comprehensive Florida Commercial Real Estate Risk Categories (2025)

This list is not exhaustive.

1. Market and Economic Risks

Florida CRE values are materially affected by macroeconomic factors including:

  • Interest rate volatility impacting capitalization rates and property values
  • Economic slowdown reducing retail, office, and hospitality demand
  • Inflationary pressures increasing insurance, taxes, and operating expenses
  • Supply chain disruptions delaying construction and increasing development costs

2. Property-Specific Risks

Risks related to individual properties may include:

  • Functional obsolescence of older or non-compliant buildings
  • Neighborhood and demographic changes impacting rental demand
  • Deferred maintenance and hidden capital expenditure requirements
  • Environmental, structural, or zoning complications

3. Liquidity and Forced Sale Risks

Florida CRE investments may lack liquidity due to:

  • Extended marketing and sale timelines
  • Discounted pricing in distressed or forced sale scenarios
  • Reduced buyer pools during periods of elevated interest rates

4. Regulatory and Compliance Risks (Florida)

Investors must comply with evolving regulatory requirements, including:

  • Zoning and development law changes
  • Flood risk disclosures and environmental testing mandates
  • Broker commission lien statutes affecting transaction proceeds
  • Increased ADA compliance enforcement and litigation exposure

5. Debt and Financing Risks

Financing-related risks may include:

  • Debt service coverage ratio (DSCR) failures
  • Loan maturity pressures and refinancing challenges
  • Prepayment penalties and yield maintenance clauses
  • Changing underwriting standards by lenders

6. Tenant and Operational Risks

Operational performance risks may include:

  • Tenant bankruptcies and lease rejections
  • Elevated vacancy rates in office and retail sectors
  • High tenant improvement and leasing costs
  • Operational expense volatility

7. Florida Climate and Insurance Risks

Florida-specific climate risks include:

  • Hurricane and wind mitigation requirements
  • Rapidly rising insurance premiums or limited availability
  • Flood zone limitations and NFIP coverage caps
  • Sinkhole and geological risk exposure in certain regions

8. Construction and Development Risks

Development projects may encounter:

  • Material and labor cost escalation
  • Permitting delays and regulatory approvals
  • Contractor defaults and mechanic’s lien exposure
  • Title and completion uncertainties

9. Technology and Cybersecurity Risks

Modern CRE assets face emerging risks such as:

  • Smart building system vulnerabilities
  • Data breaches affecting tenant or operational systems
  • Regulatory requirements for technology oversight

Mandatory Pre-Investment Due Diligence (Florida CRE)

Clients are solely responsible for completing all due diligence prior to investment, including but not limited to:

  1. Phase I and Phase II Environmental Site Assessments (as required)
  2. ALTA surveys, title commitments, and zoning verification
  3. Review by Florida-licensed legal counsel
  4. Independent CPA and tax advisor consultation
  5. Financial modeling consistent with long-term holding assumptions

Florida-Specific Investor Acknowledgments

Investors acknowledge the following requirements:

  • Properties are commonly sold “as-is” without warranties
  • Flood risk disclosures and environmental compliance are mandatory
  • Insurance availability must be verified prior to closing
  • Commercial real estate investments involve inherent uncertainty

No Guarantee of Performance

CAG provides no guarantees regarding property performance, appreciation, income generation, financing availability, or market outcomes. All investment decisions are made solely by the client at their own discretion and risk.

Governing Law and Jurisdiction

This disclosure is governed exclusively by the laws of the State of Florida. Any legal actions or disputes shall be brought solely in the state or federal courts located in Hillsborough County, Florida.

Commercial Advisory Group
Powered by REAL Brokerage, LLC
Phone: (813) 363-1009
Email: info@CommercialAdvisoryGroup.com

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