Introduction to Due Diligence in Commercial Real Estate Sales: Buyer and Seller Considerations, Pitfalls to Avoid
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Beginner
- work Practice Area
Real Property - Transactions
- event Date
Monday, October 28, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will provide new real estate attorneys with an overview of the due diligence process to be conducted before finalizing any commercial real estate sales transaction. The panel will examine obligations and issues facing buyers and sellers and will discuss how to best define due diligence provisions in the purchase and sale agreement (PSA).
Mr. Welch handles real estate transactions for high-profile individuals and businesses in the entertainment, advertising, restaurant, personal care, and professional services industries. He regularly advises on purchases, sales, leases and financings of a wide range of commercial properties -- including retail stores, restaurants, music studios, art galleries, advertising agencies, gyms, professional offices, schools and other public spaces across the country. He guides clients at every stage of their real estate journey – from opening their places of business, to buying and selling land and buildings, to purchasing investment properties and personal residences. In addition to his real estate transactions practice, Mr. Welch works with the the firm’s Litigation Group to resolve real estate-related disputes, and with the Restaurants Group to provide legal advice to restaurateurs and their business partners. Mr. Welch serves as Chair of the New York City Bar Association’s Hospitality Law Committee. He has presented on real estate issues for the New York City Bar Association and other organizations.
Ms. Spendlove is on the Board of Directors of Dentons Durham Jones Pinegar and practices in the Real Estate Section, the Business & Finance Section, and the Intellectual Property Section. She represents buyers and sellers in purchasing, selling, leasing, and developing commercial real estate; advises startups and established entities in creating, buying, selling, merging, and maintaining partnerships, limited liability companies, and corporations, as well as entering into a wide range of business contracts. She also handles intellectual property issues such as trademarks and copyrights.
The due diligence process is a critical step for buyers to take before finalizing any commercial sales transaction. The process allows buyers to thoroughly inspect the property, the seller, financing, and compliance obligations to limit any costly, post-sale risks and liabilities.
The scope of the process is defined by the transaction's objectives. For example, when purchasing a building, an investor interested in its income-producing potential may focus on current leases and tenant payment history whereas a developer intending to use the property for a particular purpose may be more interested in examining zoning ordinances and property codes to see if the intended use is permitted.
While much of the due diligence process is focused on the buyer's needs, sellers have certain obligations and concerns in addition to producing the extensive documentation requested by the buyer such as possible third-party liability if an inspector hired by the buyer were to be injured on the property.
New attorneys representing buyers and sellers should understand the comprehensive scope of the due diligence process and how to best protect their clients' interests when drafting due diligence provisions in the PSA.
Listen as our expert panel provides an overview of the due diligence process for buyers and sellers in commercial property sales transactions. The panel will discuss how to navigate the issues for both parties to avoid potential pitfalls while successfully guiding clients through the sales transaction.
- Introduction
- Purpose of due diligence
- Understanding the transaction's objectives
- Defining the scope of due diligence
- Due diligence process and required documentation: buyer and seller considerations
- Physical inspection of the property and buildings
- Environmental review
- Financial analysis
- Legal review (e.g., title searches, contractual obligations, pending litigation)
- Drafting due diligence provisions in the PSA
- Practitioner takeaways
The panel will review these and other key considerations:
- On what areas should buyers focus when performing due diligence? How are these impacted by the objective of the transaction?
- What are the obligations and issues facing sellers during the due diligence process?
- How can counsel best protect their clients' interests when drafting due diligence provisions in the PSA?
- What are best practices for practitioners when guiding clients through the due diligence process?
