Wednesday, August 11, 2010

Key Ingredients for Your Commercial Property Due Diligence Package

The property due diligence package is an important tool in marketing any property efficiently and effectively. By preparing the due diligence package early in your process of putting the property on the market, the information provided should better qualify any potential buyers and allow you to focus and negotiate with “real” buyers who understand what is available for sale.

Preparing information to assist the marketing of your surplus property begins in a search of your files for historical documents relating to the property’s past use, operational permits and legal documents, and organizing relevant information in to a due diligence package for use by your team, the real estate brokers and your potential buyers.

NAI Rio Grande Valley's team of commercial real estate professionals has the resources to assist in this process. Visit us online or call to learn more about NAI RGV and our team.
Below is a sampling of items that potentially should be included in your due diligence package:

•Property/Facility Overview – One page description of the property to include acreage; building square footage; building types and use; zoning classification; and a brief summary of its past use.

•Property Aerial and Site Photos– Aerial pictures are reasonably easy to obtain as the technology is readily available. Organizing photos of the site to highlight features and conditions of the property is a requirement.

•Property Survey and Preliminary Title Report – If available a survey is very helpful for establishing the property boundary and acreage and the inclusion of a preliminary title report assists in understanding any title flaws that need to be addressed or understood by the potential buyer.

•Zoning and Land Development Ordinance – Providing the current zoning and land development ordinances confirms for the buyer the uses allowed and process for obtaining approval for use or development changes.

•Environmental Summary – This summary should include a brief written description of the past uses of the property; any previous Phase 1 or Phase 2 evaluations and any other relevant information concerning the property.

•Tax Assessment Records – Providing current and recent tax bills confirms property assessment and payment required.

•Economic Zone Incentives – If appropriate, including the economic development incentives description and local contact will provide the potential buyer with information for evaluating their ability to qualify for the potential incentives.

•Building Drawings – CAD drawings relating to the construction of the buildings, the current occupancy, layouts, etc.

•Standard Form Agreements – If you have a standard form Confidentiality Agreement and/or a Purchase and Sale Agreement, make these documents available early in your discussions as they can set the tone and direction of any negotiations with the buyer.
Source: Rick Leighton, NAI Global