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Preparing information to assist the marketing of your surplus property begins in a search of your files for historical documents relating to the property’s past use, operational permits and legal documents, and organizing relevant information in to a due diligence package for use by your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.
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.
About the author
Scope of Service Experience Mr. Leighton is responsible for corporate account management and new business development of corporate accounts within NAI Global's Corporate Services Group. He also provides leadership to the NAI Global Technology Team which provides supporting system solutions for corporate accounts. Education BA, Accounting - Ursinus College, Collegeville, PA Background & Experience Thirty-two years of varied experience within the chemicals industry relating to real estate, sales, service support and marketing. Former Corporate Real Estate Manager, Marketing Manager, and Sales Administrative and Customer Service Manager. Organized and led a best practices group with fellow corporate real estate managers from global chemical firms active in industrial real estate activities. This group exchanged best practices relating to environmental, process improvements, site selection, support systems and procedures. The exchange provided members of the group with validation and new ideas for improving the effectiveness and productivity of their corporate organizations. Manager, Real Estate and Space Planning - Air Products and Chemicals, Inc. Accountable for managing all real estate activities (acquisitions, disposals, options, leases, development, zoning, easements, licenses, permits, appraisals, etc.) in support of the company's businesses within the Americas, the property management functions (including lets to third parties and landlord responsibilities) for the company's let properties, the information system for the company's global real estate holdings and space planning activities for all corporate and operating groups in the Allentown, PA area. Professional Affiliations & Designations Mr. Leighton is a licensed Real Estate Salesperson in Pennsylvania and is a member of Industrial Asset Management Council (IAMC). Mr. Leighton is the author of several published articles on Facilities and Real Estate. Additionally, Rick has been a speaker at the annual ARCHIBUS User Conference and partcipated on a panel at the Council of Supply Chain Management Professionals (CSCMP) 2006 Annual Conference. Significant Transactions Key accounts include Air Products and Chemicals, Inc., Bombardier, Dow Corning, E. I. DuPont, First Group Americas and U.S. Steel.
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