Financial due diligence
Financial due diligence
Financial insight and transparency to avoid misinformed acquisitions
To mitigate risk, no acquisition of a commercial property should be closed without a proper review of the asset’s financials.
Identify red flags and gather critical information through the financial due diligence process, so you are better prepared to make the go, no-go or which way to go decision.
With experience serving large and small clients we provide:
Strengthen your bid and limit post transaction surprises with the proper financial due diligence
Our financial due diligence services include:
- Independent appraisals, to best understand the current value of the property, at the time of sale – and to support the transaction price
- A review of property tax, including:
- Property tax forecasting / tax projections
- Assessment of tax liability and review of tax classification
- Property tax considerations for underwriting
- Lease and tax allocation (tenant vs. landlord)
- Ensuring future assessment appeal rights are not compromised by the vendors’ inadequate or non-compliance with assessment authority information requests
- Review of outstanding tax appeals and analysis of supplementary assessments
- Review and summary of all leases and tenant correspondence; highlighting all notable options to expand, terminate, etc.
- Reconciliation of leases, rent letters, estoppels, and / or architectural certificates, and bank statements to the rent roll
- Verification of recovery revenue, with particular attention to things like CAM (common area maintenance) charges, and tax charges / assessments
- Review of other financials including historical and audited statements, YTD performance, current budget, variance analysis with a cashflow forecast, accounts receivable / payable, and miscellaneous revenue (license agreements, etc.)
- In-person tenant interviews to understand their experience, concerns and potential opportunities for improvement; and, surveying the competing office complexes to understand market rents
- Benchmarking to support your valuation assumptions in underwriting
Physical due diligence
When buying a commercial asset, it’s important to have the property’s condition physically inspected and assessed from a financial risk perspective.
Property tax assessments & appeals
Understand the valuation parameters, legislation and tax policy that drive your property’s assessment and tax liability.
Contact a qualified professional
Our multi-disciplinary team of professionals brings a wealth of industry experience and unparalleled data-driven insights, providing the clarity you need to make informed decisions.
Our workView All
Property appraisals, Property tax assessments & appeals, Economic advisory & market research
Hyatt Regency Calgary
Development due diligence, Financial due diligence, Property tax assessments & appeals
Five points an investor should consider when buying income producing properties
Apr 18, 2017
The price paid for most income producing properties is directly related to their current and expected income flow. Verifying the current income flow and estimating the future income flow is a time consuming but important process. Typically, for larger properties, an estimate of cash flow over a 10 year period should be conducted.
Tariffs & Construction Costs
Oct 5, 2018
Tips to manage risks and mitigate the impact of tariffs on construction costs and your bottom line.
Highlights from the largest industrial transaction in Atlantic Canada
Nov 28, 2019
Rising land values and construction costs in the real estate market over the past several years are raising risks for developers, lenders and equity investors. This precarious situation requires a new approach for understanding and managing development risk – an approach with pro formas as the focus.
Your CRE asset value during coronavirus: 4 steps to mitigate risks
Apr 15, 2020
What owners, managers and investors can do to mitigate risks on CRE assets during the COVID-19 market disruption.