Sue McConnachie
| Aug 30, 2017
Purchasing Commercial property can be expensive and risky. Due Diligence typically includes surveys, engineering and environmental reports, zoning compliance and or topographical studies. This due diligence deals with the property itself, but don’t overlook the tenants that occupy the building.
Adding a Quality Credit Acquisition Report to the due diligence process removes the uncertainty from decisions made to analyze the cost benefit of an acquisition. It will help assess the risk as well as the likelihood of the future income stream from the property. Gauging the underlying quality of the existing tenant base is key.
Even if the seller has proof that the tenants have been reliable to date, there are often developing financial issues to consider. It is very important to ensure that the correct, current, full legal names are on the lease. The reports can be produced without the consent or knowledge of the property’s current tenant base.
Before acquiring commercial property, you want to assess risk by looking at the following areas.