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Due Diligence

Birtcher Anderson prides itself on its attention to detail in performing its due diligence prior to acquiring a property. Because we generally invest alongside our partners, we understand that the financial success of the investment depends on our developing a deep knowledge of the market, the property, and the tenants prior to closing.

Through a system of checklists and processes developed and improved over decades, our due diligence ensures that all aspects of a property are analyzed and understood. The information generated from this work is incorporated into the property underwriting and, ultimately, the business plan for the investment.

These major areas of our review (and related detail) include:

Physical:

Property Condition Assessment: A complete assessment of each building’s structural integrity as well as the component systems such as roof, HVAC, curtain wall, asphalt, elevators, ADA, etc. Phase 1 Environmental Report: For understanding any chemical or environmental issues at the property.
Seismic Evaluation – performed in areas prone to earthquakes.
Review of As-Builts, COO’s and other relevant plans and permits.

Financial & Operations:

Complete lease review and abstracting and a comparison against the terms detailed in the seller’s offering.
Review of all vendor contracts.
Review of prior financial performance of property, including detailed analysis of historic income statements and general ledgers and the history of capital improvements made to the property.
Property tax analysis including a detailed analysis of local taxation codes and an analysis of how the purchase may affect taxes post-closing.
Development of a detailed Argus-based financial proforma with a budget, leasing projections, space by space tenant improvement assumptions and financial modeling, all developed and agreed to by the entire acquisition team.

Tenant:

Review of all tenant files, correspondence and documentation.
Conduct interviews with all tenants to discuss their tenancy and any property issues and begin a relationship, as they too will be our partner in this new investment.

Title/Survey:

Review of Title Report.
Update and review of ALTA survey

Market:

Tour and understanding of market and property comparables.
Meetings with multiple brokerage companies to gain insight as to market conditions, trends and projections for underwriting.

Closing:

Preparation of all prorations for vendor service contracts, security deposits, rents and CAMs billed and collected.
Researching, negotiating and securing appropriate financing for the investment’s business plan to maximize financial returns for the investors.

Transition:

After closing, meeting with new property management, accounting team, and leasing team to transfer all files, information and knowledge gained during the due diligence process to ensure implementation of the investment’s Business Plan.