Due Diligence When Selling a Commercial Property

Posted on September 26, 2017

Some experts believe that the due diligence should begin during the negotiation process of a property sale. In reality, sellers should begin the steps of analyzing and addressing a wide array of issues long before putting a property up for sale. By being proactive, sellers can put in place the systems and elements that can help to ensure they maximize a property’s value and receive a sales price above comparables.

In addition to the standard legal and financial due-diligence steps required for a property sale, sellers should prioritize the following action items:

  1. What is the realistic property valuation, based upon current tenants and comparable properties in nearby neighborhoods?
    Are there any variables that could impact existing tenant leases?
  2. Would it be of value to extend the leases of current tenants and potentially increase the property’s capitalization rate?
  3. Is the property, including all tenant space, up-to-date and compliant with building code regulations?
  4. Do you have at least three years of financial statements, capital improvements, utility bills and other operating expenses ready to share with a prospective buyer?
  5. Do you have copies of all maintenance contracts, insurance policies and other documentation?
  6. Do you know how and are you prepared to thoroughly vet potential buyer(s)?
  7. By working with professionals experienced in buying and selling commercial real estate, property owners can be better prepared to expedite a deal and receive top-dollar from qualified buyers.

The professionals with Orion Real Estate Group work with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

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