Real Estate Due Diligence
Over the past several years there has been a trend toward the creation and implementation of less intrusive “Preliminary Assessments”. These assessments can include:
> Limited Database Assessment
> Record Search with Risk Assessment (RS/RA)
> Abbreviated Environmental Screen (AES)
The attractiveness of these assessments is they are time sensitive (in some cases less than a day) and are cost effective ($200 – $750).
Based on the results of a Preliminary Assessment, the client may want to proceed with a more traditional level of due diligence such as a Transaction Screen (one week), Phase I ESA (two to three weeks) or if necessary, a Limited Soil and Ground Water Assessment (Phase II ESA).
Real Estate Surveys
As part of the real estate due diligence assessment process it may be desired to complete a survey of the real estate being evaluated. The traditional level of survey completed for this type of transaction is the ALTA survey.
Compliance Audits for industrial and commercial real estate can also be an integral part of the real due diligence process. Ensuring that a potential customer is following all applicable permit and regulatory compliance requirements can eliminate hidden liabilities not identified in traditional Phase I ESAs
Compliance Audits
Property Condition Assessment
Property Condition Assessments (PCAs) are also rapidly becoming an integral part of the standard real estate due diligence process. Completing a precursory evaluation of a property and building structural improvements can help to ensure that potential future capital expenditures are identified, quantified and accounted for by both the lender and purchaser.
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