“The due diligence stage is an essential element to a successful commercial transaction.” TDS Law (https://www.tdslaw.com/resource/the-importance-of-due-diligence/ )
There are many articles written that state the importance of due diligence, and the difference between legal and business due diligence. A quick Google search will bring up numerous pages of resources but here are a couple of real-world examples that show how Meissner Jacquét can add value to your acquisitions efforts.
- Retail center: Our lease administration team was able to identify built-in improvements in the leases that the previous owner was either not aware of or didn’t take advantage of. There was underbilling, erroneous caps applied, incorrect CAM pool denominators, and more.
Bottom Line: Through Meissner Jacquét’s due diligence process, our client was able to identify ~$1.6MM of previously unrealized value.
- Mixed-use new development: A client was looking to buy a new development retail center. The assumptions were that the income represented was accurate and that the CAM reimbursement was equal to what the leases allowed. Given this was a new construction project, there was no tangible history to rely upon. The Meissner Jacquét lease administration team was able to identify that the presumed income and recoverable expenses were not verified.
Bottom Line: Our client was able to bring down the purchase price by ~$100,000.
While it is always important to have an attorney review and advise throughout the commercial purchasing process, there is much value to be gained by having a knowledgeable and experienced professional perform a thorough review of the leases and governing documents. Due diligence is not just about “crossing your T’s and dotting your I’s”. Proper due diligence has real-world implications. It is essential to verify that the income and expenses provided by the seller are accurate.
Don’t rely on the Sellers reports alone, particularly their Pro-forma statements calculating net income used to value the property. That report should be vetted and verified by the buyer – this is our expertise! Meissner Jacquét will verify that the information on the proforma is accurate.
Meissner Jacquét is well-positioned to provide the support you need so that you can focus on your business goals.
Contact us today and let us show you how we can transform your Commercial Real Estate operation.