Any commercial real estate transaction in Texas and elsewhere should be approached seriously. Due diligence on the part of the buyer plays a crucial role on discovering the full merits of a purchase.
A close investigation into all aspects of the property, including legal concerns, is imperative.
The goals of the buyer
The goals of the purchaser determine to some extent the scope of due diligence. According to the National Law Review, the purchaser of commercial real estate should use the expected use of the property as a framework for investigation. The investigation of the property will differ for a company that seeks to develop the property as opposed to an investor looking to create a revenue stream. The investigation might look at restrictions that could prohibit a company from certain uses. These restrictions could be in the form of zoning restrictions, licensing requirements or even legal compliance matters. The financing of the transaction should be scrutinized, too, with attention paid to hidden or future costs and potential for liability.
The suitability of the property
A close look at the physical condition of the property is essential. A due diligence checklist by DealRoom lists many items to consider in a commercial real estate deal. A close look at multiple factors is the best way to assess the real value of the investment. This could involve the ordering of new inspections that look at environmental conditions as well as the state of the roof and heating and cooling systems. A consideration of the property’s compliance with the American Disabilities Act can inform the buyer of potential future costs. These are but a few of the areas to investigate with a commercial real estate purchase.
