How do you manage and organize your commercial leasing due diligence process?

1 Define your objectives

Before you start your due diligence, you need to have a clear idea of what you want to achieve from the transaction and what are the key factors that influence your decision. For example, you may want to assess the suitability of the property for your business needs, the risks and opportunities associated with the location, the expected return on investment, and the legal and regulatory implications. Having a well-defined set of objectives will help you prioritize and focus your due diligence efforts.

2 Gather relevant information

The next step is to gather as much relevant information as possible about the property and the seller or landlord. This may include documents, reports, contracts, leases, invoices, receipts, permits, licenses, surveys, appraisals, inspections, audits, and other records. You may also need to conduct your own research, interviews, site visits, and tests to verify the accuracy and completeness of the information provided by the seller or landlord. You should organize the information in a logical and accessible way, such as by using folders, spreadsheets, databases, or software tools.

3 Analyze and evaluate

Once you have collected the information, you need to analyze and evaluate it to determine the strengths, weaknesses, opportunities, and threats of the property and the transaction. You should compare the information with your objectives, expectations, and benchmarks, and identify any gaps, discrepancies, or red flags that may affect your decision. You should also consider the impact of external factors, such as market conditions, competition, demand, supply, regulations, and trends. You should document your findings and conclusions in a clear and concise way, such as by using charts, graphs, tables, or summaries.

4 Negotiate and finalize

Based on your analysis and evaluation, you may need to negotiate and finalize the terms and conditions of the transaction with the seller or landlord. You may want to use your due diligence results as leverage to request adjustments, concessions, warranties, guarantees, or contingencies. You may also want to seek professional advice from lawyers, accountants, brokers, or consultants to ensure that you are getting a fair and favorable deal. You should review and sign the final contract and other documents carefully and keep copies for your records.

5 Monitor and update

After you complete the transaction, you should not stop your due diligence. You should monitor and update the performance and condition of the property regularly and ensure that you are complying with the contract and the law. You should also be aware of any changes or developments that may affect your property or your business, such as new regulations, market shifts, or tenant issues. You should keep track of your due diligence activities and outcomes and use them to improve your future transactions.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?