CNSREIT-AR-2024 Final - Flipbook - Page 36
Significant portions of our business operations and those of our critical third-party service providers are concentrated
in a few geographic areas, including New York and New Jersey. Critical operations that are geographically concentrated
include portfolio management, trading operations, information technology, data centers, investment administration and
accounting systems. Should we, or any of our critical service providers, experience a significant local or regional disaster
or other significant business disruption, our ability to remain operational will depend in part on the safety and availability
of our personnel and our office facilities as well as on the proper functioning of our network, telecommunication and other
related systems and operations. We cannot ensure that our backup systems and contingency plans will be adequate under
all circumstances or that material interruptions and disruptions will not occur. In addition, we rely to varying degrees on
outside vendors for disaster recovery support, and we cannot guarantee that these vendors will be able to perform in an
adequate and timely manner. Failure by us or any of our critical service providers to maintain up-to-date business
continuity plans, including system backup facilities, would impede our ability to operate in the event of a significant
business disruption, which could result in financial losses to the Company and our investors.
Compliance with Regulation Best Interest by participating broker-dealers may negatively impact our ability to raise
capital in the continuous public offering of our common stock, which could harm our ability to achieve our investment
objectives.
Broker-dealers are required to comply with Regulation Best Interest, which, among other requirements, establishes a
standard of conduct for broker-dealers and their associated persons when making a recommendation of any securities
transaction or investment strategy involving securities to a retail customer. Regulation Best Interest may negatively impact
whether participating broker-dealers and their associated persons recommend our shares of common stock to certain retail
customers. In particular, under SEC guidance concerning Regulation Best Interest, a broker-dealer recommending an
investment in our shares should consider a number of factors, including cost and complexity of the investment and
reasonably available alternatives in determining whether there is a reasonable basis for the recommendation. Brokerdealers may recommend a more costly or complex product as long as they have a reasonable basis to believe is in the best
interest of a particular retail customer. However, if broker-dealers instead choose alternatives to our shares, many of which
likely exist, our ability to raise capital will be adversely affected. If Regulation Best Interest reduces our ability to raise
capital in the continuous public offering of our common stock, it may harm our ability to achieve our objectives.
General Risks Related to Investments in Real Estate
We are subject to risks generally attributable to the ownership of real property, including:
"
changes in global, national, regional or local economic, demographic or capital market conditions (including
volatility as a result of the ongoing conflicts in the Middle East and Ukraine);
"
future adverse national real estate trends, including increasing vacancy rates, declining rental rates and
general deterioration of market conditions;
"
changes in supply of or demand for similar properties in a given market or metropolitan area, which could
result in rising vacancy rates or decreasing market rental rates;
"
vacancies, fluctuations in the average occupancy and room rates for hotel properties or inability to lease space
on favorable terms;
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increased competition for properties targeted by our investment strategy;
"
bankruptcies, financial difficulties or lease defaults by our tenants, particularly for our tenants with net leases
for large properties;
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inflation;
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increases in interest rates and lack of availability of financing; and
"
changes in government rules, regulations and fiscal policies, including increases in property taxes, changes in
zoning laws, limitations on rental rates, and increasing costs to comply with environmental laws and the
scaling back or termination of government contracts.
All of these factors are beyond our control. Any negative changes in these factors could affect our performance and
our ability to meet our obligations and make distributions to stockholders.
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