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DUE DILIGENCE
INSPECTIONS

Partnering with a professional who can provide you with a clear, comprehensive, and unbiased assessment of a property is essential. Knowing the condition of the roof and facade is critical when calculating future repair or replacement needs into sales negotiations. Facing the surprise of expensive repairs is something all real estate investors aim to avoid. We'll provide you with an objective scope of work including recommendations based on the overall condition of a building.

3 Types of Investors

 

Three types of investors are typically engaged in acquiring commercial real estate. These different objectives alter the due diligence process and depth. Each is driven to make an acquisition for different objectives:

  1. Investment Purposes

  2. Real Estate Development

  3. Business Operations

       (the building will be home to the investing organization)

BUYER 

BEWARE!

 

 

It is considered best practice to perform a detailed due diligence before the purchase contract is signed on a commercial property. Alternatively, it can be included in the sales contract that the buyer must undertake a due diligence inspection and specify the estimated time this will take. This practice compels the seller to expedite the delivery of required documents. Findings may grant buyers a stronger hand in the transaction negotiations.

 

Reduce Risks & Garner Confidence

An informed decision can be the difference between a successful investment and a costly mistake when investing in commercial real estate. It is therefore crucial to conduct a thorough and independent due diligence inspection that mitigates risks by focusing on key aspects like roof inspections, leak detection, and building envelope analysis; all issues that may not be apparent to the untrained eye. A due diligence inspection is a comprehensive process that centers around investigating and analyzing a legal standing, financial health, property condition, and evaluating potential risks before the buyer finalizes an investment. An independent due diligence inspection is invaluable as it relies on the expertise of unbiased professionals to evaluate the property’s true condition and identify potential problems that might not be disclosed by the seller.

From The Top Down

The roof is arguably one of the most critical components of any commercial property. It shields the interior from the elements and plays a crucial role in maintaining the building’s structural integrity. A roof due diligence inspection involves gathering  history through available building documentation, interviews with personnel, historical satellite imagery, and a visual inspection of the roof itself. Visual inspections can generate enough information to create detailed reports and repair recommendations, though often do not provide a comprehensive understanding of the roof construction. Test cuts will determine whether one or two roofs exist and their types. This is a major consideration for buyers as it determines the ability to recover a roof at half the cost in the future. Infrared and nuclear inspections detect trapped moisture within the roof that would otherwise be missed with a visual inspection alone. We always recommend an infrared inspection and test cuts in conjunction with the visual inspection when possible. In many cases the option for these tests is determined by the willingness of the seller. The final report is an overview of the pre-existing conditions, material type, age, area of damages, pictures and recommended repair solutions. The presence of water, age of the roof, and whether one or two roofing layers currently exist can all play major rolls in the sales negotiations. It is imperative to have all available information to avoid any surprise costs later.

 

Wall-to-Wall Evaluation

The exterior walls, windows and doors, act as barriers against external elements. Building envelope analysis identifies areas of concern, such as failing materials, poor construction details, or even inadequate insulation. When any of these components become compromised it can result in energy inefficiency, moisture infiltration, leaks, and ultimately unhappy tenants. By identifying potential risks and understanding the true condition of the property, investors can negotiate more effectively, plan for future maintenance or improvements, and avoid unwelcome surprises after acquiring the property. It allows investors to plan budgets wisely and set realistic expectations for the property’s profit performance over time.

Successful Purchases & Sales

Whether buying or selling, commercial real estate demands careful consideration and thorough evaluation. It is necessary to uncover facts and circumstances that may impact the value of the property being either sold or acquired. Information uncovered during the course of a due diligence inspection may lead the buyers to conclude that the purchase is a bargain, that they should renegotiate pricing, or cancel the deal altogether. Sellers can also use the due diligence to expedite the sale of commercial real estate by organizing and preparing due diligence documents and record of addressed issues for buyers in advance of placing the property on the market.

Independent third-party due diligence inspections are a critical tool in mitigating risks and gaining confidence in investment decisions. Through roof inspections, leak detection, and building envelope analysis, investors can uncover hidden issues that might otherwise remain undisclosed. In the realm of commercial property real estate, one principle remains constant: informed decisions drive success. Let us help you navigate complex markets armed with comprehensive knowledge, and transform potential risks into opportunities for growth. Whether you are a seasoned investor or new to the commercial real estate scene, due diligence inspections can yield confident and prosperous investments.

Elements Management strives to make a positive impact on your building’s performance and your peace of mind by providing you with unbiased, third-party information that empowers you to make informed decisions about your property. Unlike businesses that focus on selling materials and installations, we prioritize your needs and strive to deliver comprehensive solutions that align with your best interests.

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