Commercial real estate investors have always had a lot of moving parts in a closing to be in control of – with due diligence being one of the most important pieces. It is vital for a commercial real estate investor to have as much information about a property as it can prior to purchase.
As COVID-19 has made many aspects of investing more difficult, it has especially affected the closing and due diligence process. As a result, commercial real estate investors face even more challenges than they did before. Below are five important issues of which investors should be aware in a COVID world.
1. Access – For a good due diligence inspection, you should walk all of the units in a property during the diligence period. But in a COVID world, that is likely to require tenant approval. If you are the Buyer of a commercial property, make sure to get the Seller’s assistance in getting that approval.
2. Safety – When walking the property, both Sellers and Buyers should ensure that safety, health, and cleanliness standards are adhered to. They should be set out in the purchase agreement.
3. Tenant Health – Its not just the Buyer and Seller who have to worry about health and safety issues. Its important to protect the Tenants’ health also. Its imperative, therefore, that the Seller stays abreast of any potential illnesses at the property and lets the Buyer know.
4. Delays, delays, delays – Proper due diligence requires getting a lot of different people involved. Make sure you have contingencies in your agreement if someone gets sick or cannot complete a job on time.
5. Be Safe – This is a great time to purchase a commercial property. You just have to remember to take all health and safety precautions that are possible. And make sure those precautions and contingencies are built into the purchase agreement.
For more information on this or any other topic relating to the closing of a commercial property, please contact Bukowski Law Firm at 512-614-0335. Thank you.