When engaging in commercial real estate transactions for clients, it is important to conduct due diligence on the property and the transaction in order to avoid any unwelcome surprises after the transaction closes. Here are five of the top reasons to thoroughly vet commercial real estate transactions with property due diligence review:
- Caveat emptor. There is a presumption that the parties involved in commercial real estate transactions are sophisticated, so consumer protection laws designed to protect individual homeowners generally don’t apply.
- Identify legal restrictions. While it may seem basic, commercial property owners who fail to investigate title restrictions, zoning laws, or permit requirements for a target property may find themselves limited in what they can do with the property after closing. Due diligence can uncover encroachments, easements, restrictive covenants, or other contractual limitations.
- Evaluate leases. When a commercial property has existing leases and tenants in place, due diligence can provide prospective buyers with an evaluation of lease provisions and obligations that could materially impact them. A buyer does not want to find out, after closing, that their tenants’ leases provide unusual (and unwanted) provisions that may have long-term financial impact.
- Analyze financial terms. Conducting commercial real estate due diligence provides the buyer an opportunity to evaluate the terms of the transaction. This takes on heightened importance when the seller is financing some or all of the transaction. Purchasers need to not only be comfortable with the terms and reserve requirements; they also need to ensure they can adhere to the lender’s reporting requirements.
- Avoid surprises. Whether the buyer is an investor, a developer, or the end user for the property, conducting thorough due diligence is the best way to make sure that the property’s characteristics actually meet the buyer’s requirements and expectations for use.
Utilizing expert support for the thorough due diligence requirements in a commercial real estate transaction is critical for making decisions in the best interests of your organization. Baer Reed real estate property due diligence services offers you access to experienced, expert attorneys and support. Contact us today, or call (888) 433-1990 for more information.
Mr. Reyes graduated with honors from the Ateneo de Manila University, where he received the Procter and Gamble Student Excellence Award. He obtained his Juris Doctor degree from the Ateneo de Manila School of Law. During law school, Mr. Reyes was part of the Philippine delegation to the Willem C. Vis International Commercial Arbitration Moot held in Vienna, Austria. He was also a member of the Ateneo Society of International Law and the St. Thomas More Debate Society. He completed his internship at the Public Attorney’s Office. He wrote a thesis entitled: “To Kill A White Elephant: An Analysis of the Fiduciary Exception to the Corporate Attorney-Client Privilege”. Mr. Reyes is admitted to practice law in the Philippines and the State of New York.
Ms. Lardizabal-Manzano is a graduate of San Sebastian College-Recoletos, where she earned her B.A. in Political Science. In 2003, she received her law degree from Lyceum of the Philippines and was admitted to practice law in 2004.
Matthew Hersh earned a B.A. in Political Science from Columbia University in 1990 and graduated cum laude from Georgetown University Law Center in 1999. He also holds a master’s degree in international relations from the Georgetown University School of Foreign Service.
Cap. Avi Levak (Res. IDF) graduated from from Israel’s prestigious Ben-Gurion University of the Negev with a Bachelor of Science in Computer Science and Mathematics. He is also a Leadership and Communication coach trained in TuT coaching by Alon gal in Israel. Avi specializes in high-level, in-depth analysis of business and client needs, within systems and software strategy and architecture.
Ms. Tyler graduated cum laude from Georgetown University and received her law degree, cum laude, from Georgetown University Law Center. During law school, she interned at the United Nations Economic Commission for Europe. She also worked on The Tax Lawyer journal and was a member of the award-winning Barristers’ Council Mock Trial Team. Ms. Tyler is admitted to practice law in the State of California and the District of Columbia.
Ms. Cruz-Anonuevo graduated cum laude and top nine in her batch from Miriam College with a degree of Bachelor of Arts in InternationalStudies. She obtained her Juris Doctor degree from Ateneo de Manila University School of Law in Rockwell. During law school, she interned in Rivera, Santos, Maranan & Associates. She was also part of Ateneo’s Labor Law Bar Operations. She wrote her thesis on, “Stealing Privacy: Limitations on Media’s Photographic Invasion.,” Ms. Cruz-Anonuevo is admitted to practice law in the Philippines.
Ms. Aquino-Batallones obtained a Bachelor of Arts degree in Development Studies (with Minors in Global Politics and Hispanic Studies) from the Ateneo de Manila University. In 2011, she received her Juris Doctor degree from Ateneo de Manila University School of Law. During law school, she interned at Romulo Mabanta Buenaventura Sayoc & de los Angeles then became an intern of Ateneo Legal Services Center’s Clinical Legal Education Program.
Mr. De Guzman graduated from San Beda College with a degree of Bachelor of Arts Major in Economics and received his law degree from San Beda College of Law. He is multilingual and is fluent in three languages: Chinese, Filipino, and English. He was admitted to the Philippine Bar in 2003.