Improved Real Estate Acquisition Checklist

Written by Bullpen Editors

June 23, 2020

When acquiring improved commercial real estate, you have many things to worry about.  The first step in a successful acquisition is to be and stay organized.  The following ‘Improved Real Estate Acquisition Checklist” will help you do just that.

1. Letter of Intent

2. Purchase and Sale Agreement. 

3. Earnest Money Deposit. 

4. Review of Due Diligence Material provided by Seller during the Due Diligence Period: 

  • title information (including, but not limited to, Seller’s existing Owner’s Policy of Title Insurance), 
  • surveys and survey information, 
  • lease agreements, amendments, personal guarantees, corporate guarantees 
  • service contracts 
  • management agreements, 
  • all site plans, all flood plain information, as-built plans and specifications, construction documents relating to the construction of any improvements underground, at ground level, or above ground, construction contracts relating to the construction of any improvements underground, at ground level, or above ground, 
  • all engineering plans and documents, 
  • geotechnical assessments/studies, 
  • environmental assessments/studies, 
  • insurance policies, and insurance certificates, 
  • licenses, 
  • warranties, 
  • all city, county, municipal, local, state, and/or federal governmental and/or agency agreements, contracts, written understandings, permits, authorizations, and approvals relating to and including, but not limited to: unconditional building permits, curb cut approvals, signage permits, re-plats of the Property, development agreements, development permits, construction permits, rezoning of the Property, tax incentives, tax increment financings or “TIF Agreements”, tax abatements related to the ownership and/or construction or improvement of the Property, assessment reductions and/or tax reductions related to the ownership and/or construction or improvement of the Property, and the Property being located within an “Opportunity Zone” (the “Governmental Permits”), 
  • all documents related to utilities and usage of utilities, 
  • financial statements for the previous three (3) years for the Property, and . 

5. Investigations/Inspections of the Property during the Due Diligence Period: 

  • a property condition assessment assessment/study of the Property, 
  • environmental assessment/study of the Property (to include invasive testing at Purchaser’s election), 
  • an appraisal of the Property, 
  • and such other tests, inspections, studies, and investigations of the Property as Purchaser deems necessary in its sole discretion. 

6. Draft of Organizational Documents for Acquisition Entity. 

7. Equity Commitment from Investors. 

8. Loan Commitment from Lender.

9. Review of preliminary Commitment for Title Insurance from Title Company/Escrow Agent and Schedule B – II Exception Documents. Title Objection Letter

10. Updated Survey. 

11. Appraisal. 

12. Meeting with/discussion with Tenants. 

13. Zoning Compliance Letter. 

14. Finalize Equity Documents. 

15. Negotiate and finalize Loan Documents. 

16. Draft Closing Documents for Property Acquisition. 

17. Confirm Property Insurance in place at Closing. 

18. Draft Closing Instructions Letter to Title Company based upon agreed proforma Owner’s Policy of Title Insurance. 

19. Finalize Settlement Statement for Property Acquisition. 

20. Obtain an original Lease Agreement files and Property keys at Closing. 

21. Close/confirm Equity funding. 

22. Close Loan. 

23. Close Property Acquisition.

Contributor: Christopher Rausch

Over twenty six (26) years, in both General Counsel roles [(1) (Novus Development Company in St. Louis, Missouri; (2) Commercial Development Company, Inc. & Environmental Liability Transfer, Inc. in St. Louis, Missouri; and (3) Lockard Companies in Cedar Falls, Iowa] and in private practice, Chris has amassed a sophisticated national law practice representing owners, developers, general contractors, design-builders, design-build subcontractors, subcontractors, borrowers, lenders, and bankruptcy trustees: (i) in corporate matters, (ii) in litigation (civil, construction, and bankruptcy), (iii) in the acquisition, disposition, development, financing (debt and equity), construction, and workout of commercial real estate projects, and (iv) in the acquisition and disposition of companies. 

Chris has demonstrated expertise in structuring, drafting and negotiating a wide variety of complex agreements, including corporate and ownership documents, asset purchase agreements, stock purchase agreements, development agreements, purchase and sale agreements, environmental indemnity agreements, agreements for the assumption of environmental liabilities and indemnification of seller, construction contracts, easement agreements, condominium agreements, improved property leases (office, retail, industrial, seniors), ground leases, joint venture and partnership agreements, private placement memorandums, real estate financing (equity, commercial lender acquisition debt, commercial lender development debt, commercial lender construction debt, acquisition conduit [special purpose entity – bankruptcy remote] debt, replacement or permanent conduit [special purpose entity – bankruptcy remote] debt), and loan workout & forbearance agreements.

Chris has completed commercial real estate and business acquisition and disposition transactions in the following states:  Arizona, California, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Dakota, Tennessee, Texas, Washington, and Wisconsin.

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