Before you jump into any commercial real estate deal make sure you’ve hired the best to assist you in your due diligence. This crucial step in any business decision can mean the difference between success and disaster.
Trust the team at Real Estate Matrix to help you in this process. We have a proven track record and extensive knowledge of the industry.
We invest heavily in sophisticated technology to maintain an extensive market database, provide our team with the finest analytical tools, and ensure the highest level of efficiency.
It is important to us to provide you with data that enables you to make better and more profitable decisions regarding all your commercial real estate needs.
As a result, we are the best solution for due diligence.
Commercial Property Appraisal: Due Diligence is a Critical Step
When you’re the potential buyer of a property, it’s critical to not leave any stone uncovered.
Due diligence is a comprehensive, complex, and critical stage in any commercial real estate acquisition. It will help you to reduce risk and lower your costs.
It’s important to have all the necessary documentation in your hands before you start the intensive due diligence process.
It’s imperative to review all documents to look for any and all possible red flags with the property, title, tenant relationships, and numerous other considerations.
Commercial Property Appraisal: Due Diligence Checklist
To aid you in this process we have created the checklist below, which outlines many of the key documents, records, and financial information needed for a full and complete due diligence on a prospective property acquisition.
It’s our intention to encourage clients to incorporate the checklist below into the sale contract and require that the specified due diligence period will not commence until the date that the seller produces the last of each of these deliverables.
- The most recent title commitment on the property in the possession or control of seller together with all related documents.
- A recent ALTA survey and topographic study for the property and a copy of the construction blueprints, engineering plans and as-built drawings in the possession or control of seller.
- A legal description of the property.
- A declaration of covenants, conditions, restrictions, reservations and easements for the property.
- Zoning Compliance Certificate for the property and all zoning approvals (including variances and any pending applications).
- Seller’s third-party engineering, environmental reports, appraisals, soil tests, boring reports, foundation reports, and termite or radon studies.
- A true, correct and complete copy of each written lease and each guaranty.
- Accounting report of all rent and other income, common area maintenance, security deposits and real estate tax contributions paid by any tenant at the property, including, without limitation, a certified rent roll, showing current rent, previous rent if applicable, delinquencies, security deposits, years of occupancy, lease commencement date and lease termination date.
- All security deposits and any other amounts to which any tenant, vendor, or any other party may be entitled.
- A copy of the last three years’ real estate tax bills, including special assessments or incentives, copies of all tax protests, related correspondence and protest results for the property and copies of the prior two years’ utility bills for the property.
- An accounting of all income and expenses related to the property, including collection reports and tax statements for the last three years.
- A list of all personal property, if any, owned by the seller, located at the property, and used or useful in connection with its operation and maintenance.
- A list of all permits, partial certificates of occupancy, certificates of occupancy, warranties, government notices, special assessments, code violations and unexpired guaranties and copies of same in seller’s possession or control.
- A copy of existing insurance policies and certificates and any pending claims against the property.
- A schedule of pending litigation, if any, affecting the property or seller’s ability to convey the property.
- Any and all other matters as purchaser may deem reasonably necessary to satisfy itself, in its sole discretion, concerning the property and the status of the property’s title.
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When you’re the potential buyer of a property, you deserve to have all the necessary documentation in your hands before you start the intensive due diligence process.
We hope this checklist will serve as a helpful guide for the items you’ll need to make the most informed decision possible on your next real estate acquisition.