Financial default risk is the possibility that the project will not generate sufficient cash flow to pay interest or repay the borrowed capital. It usually arises when sales or rentals fall short of projections.

Refinancing risk: This occurs when a short-term debt must be renewed, but the market offers more demanding conditions or there is no access to financing. This may jeopardize the continuity of the project.

Interest rate risk: In structures with variable rate debt, a rise in interest rates may reduce profitability or even make the business unviable. This risk increases in unstable macroeconomic contexts.

Prepayment risk | Some debt structures include clauses that allow the lender to demand prepayment if certain covenants are breached. This can accelerate repayment times and force unplanned divestments.

Risk of insufficient presales | Many projects depend on reaching a minimum number of units sold before construction begins or in order to access financing. If this is not achieved, the project may be delayed or cancelled.

Unforeseen cost risk | Increases in materials, labor or operating expenses may alter the original budget and affect profitability or payment performance.

Delays in permitting, construction or delivery directly impact projected cash flows, stretching returns and generating higher financial costs.

Vacancy or low absorption risk | Once the project is completed, there may not be enough demand to rent or sell at the expected rate, compromising cash flow.

Risk of oversupply | The simultaneous entry of multiple similar projects in the same area can saturate the market, putting downward pressure on prices.

Legal or regulatory risk | Regulatory changes, conflicts with land use regulations or lawsuits may delay or paralyze the project.

If the company in charge has financial, management or reputational problems, the project may be affected in terms of quality, time or continuity.

Construction quality risk| Technical failures or hidden defects can generate additional post-delivery costs, legal claims and loss of asset value.

Reputational risk | Any scandal, conflict with buyers or incidents during construction can affect the perception of the project and its value.

Currency risk : In countries with high volatility, the difference between the currency of financing and the currency of projected revenues may deteriorate margins.

Illiquidity risk | Exiting a real estate project early usually means accepting significant discounts, as assets do not always sell quickly or at a good price.

Low debt coverage risk (DSCR)| If the ratio of EBITDA to debt service falls too low, it may trigger lender alerts or restrict dividends.

Environmental risk | Land contamination, archaeological findings or conflicts with communities may generate unforeseen costs or stoppages.

Risk of corporate conflicts | Differences between partners, investors or sponsors may affect decision-making, generate friction or even lead to legal action.

Buyer concentration risk | Having few large buyers (e.g., a single institutional investor) can be risky if one defaults or withdraws.

Risk of forced or early exit | In the event of liquidity needs or external pressures, a sale may be forced before the optimal moment, thus giving up value.