Commercial Property Due Diligence

To mitigate the risks and protect your capital, it is imperative that correct due diligence is undertaken prior to any commercial property acquisition.

Fortunes are easily made in commercial property… and just as easily lost. To help mitigate the risks, we regularly undertake due diligence on commercial properties for our clients.

Pre-purchase advice… Is it a good investment? What are the risks? We’ll give you the pre-purchase advice you need to make the right decision.

We have significant experience in pre-purchase due diligence and are familiar with the many challenges of correctly analysing commercial property acquisitions.

Using this experience we have developed a set of proprietary analysis tools to help us provide…

Due Diligence Advice on Commercial Property Acquisitions

Deliverable: We will provide you with a detailed investment analysis and risk assessment of the property. As part of our one-off due diligence commercial property advice, we will…

Analyse the property’s physical characteristics, including…

  • Type and area of each tenancy.
  • Usage mix and areas within each tenancy.
  • Other areas enjoyed by each tenancy.
  • Car parks – secure, covered, uncovered.
  • Construction method & materials, and any issues therewith.
  • Identification of potential capital expenditure requirements.
  • Site visit, if required.

Analyse the legal and regulatory influences, including…

  • Review regional and district plans for the area.
  • Check current and proposed zoning.
  • Check impact of any planned public works in the area.
  • Review the Title.
  • Review the LIM report.
  • Review the property file held by Council.

Analyse the property’s financials, including…

  • Analysis of current rental income by tenant, area and sub-area.
  • Market rental assessment.
  • Assessment of current capital value.
  • Assessment of potential future capital value.

Analyse the deal, including…

  • Provide pricing guidance.
  • Review sale & purchase agreement.
  • Accounting, GST and tax checks of sale & purchase agreement.
  • Background check the vendor.
  • Assist with negotiating the deal.
  • Assist with finance applications.

Analyse the property’s tenants, including…

  • Analysis of each tenant’s lease with particular attention to lease clauses, term, rights of renewal and expiry date.
  • Review of each tenant’s financial position.
  • Review of each guarantor’s financial position.

Analyse the competition and area, including…

  • Review vacancy rates in the area.
  • Review trends for the area.
  • Assess the current and future economic viability of the area.

Commercial Investors

We mentor investors who are new to commercial property. We also work with commercial property investors who want to improve rentals, update or reorganise leases, or acquire or dispose of properties in order to improve their commercial property investment portfolios.