Due diligence defines the risk in any commercial real estate acquisition.
Acquiring property exposes you to considerable risks. Without due diligence, those risks are unknown, unquantified and unmanaged. If problems are discovered after the transaction is completed, your commercial property’s investment values can fall.
Why do you need commercial real estate due diligence?
The built asset is laden with risk. Commercial property may be poorly designed, poorly built, use inferior materials, be nearing the end of its life cycle, lack infrastructure connectivity or be fast becoming obsolete due to technological and legislative advances.
Acquiring a commercial property without carrying out proper real estate due diligence usually limits your access to funding.
Poor real estate due diligence, carried out by unqualified or inexpert surveyors with low professional indemnity insurance, exposes you to a real estate investment that is potentially damaging, both in financial and reputational terms.
For corporate transactions, it may sour the wider commercial benefit elsewhere in the transaction. It will also seriously call into question corporate governance.
What makes good real estate due diligence?
Good real estate due diligence, carried out by specialist chartered building surveyors, will properly identify and quantify the risks.
If the risks are significant, then you can withdraw from the process or renegotiate the sale price. At the very least, you have the option to strategically manage the risks through the life of the holding.
Good real estate due diligence also looks at the property in the context of the transaction – risks will vary depending on whether the commercial property is for investment, occupation, or part of a corporate transaction.
How we can help
Our expert chartered building surveyors specialise in real estate due diligence. They understand the construction of buildings, and the pathology of building defects and deleterious materials. They’ll also review the wider commercial considerations, such as technological, legislative, health and safety, environmental and legal liabilities.