DUE DILIGENCE CHECKLIST (EXAMPLE)
KEY INFORMATION (1/5)
Leasing / covenant strength
CHECKED
N/A
COMMENTS
CHECKED
N/A
COMMENTS
 Lease lengths and breaks / notification
 Passing rents
 Repairing obligations
 User
 Alienation
 Insurance – responsibility and cover (advise insurers)
 Rent review provisions
 Servitudes
 Rent free periods, other tenant incentives
 Calculation of effective rent
 Property management / utilities / service charge
 Indexation
 Leasing / marketing plan
 Tenant disputes
• Tenant financial statements / credit reports
• Tenant payment history
• Rent deposit list
• VAT status
• Potential liabilities for investor in case of bankruptcy covered
KEY INFORMATION (2/5)
Areas and physical / planning and use
CHECKED
N/A
COMMENTS
CHECKED
N/A
COMMENTS
• Location description
• Plans of accommodation / site and location
• Net/gross areas (BGF/NGF/GIF), confirmed by independent measurement
• Ceiling heights (finished and slab to slab) / eaves height
• Heating and cooling systems / sun protection / cabling standard
• Site cover and site density versus building permission
• Parking and adequacy for use / potential penalties
• Permitted use / consents
• Zoning / development plans
• Listing / conservation areas
• Cadastral plan
• Property registry excerpts
KEY INFORMATION (3/5)
Expenditure and building management / building survey and environmental reports
CHECKED
N/A
COMMENTS
CHECKED
N/A
COMMENTS
EXPENDITURES
• Service charge statements and capital expenditures
• Current budgets (service charges and landlord expenses
• Reserve funds
• Insurance premiums
• Rateable values and rates payable
MANAGEMENT / STAFF
• Building staff and employment terms / contracts
• Building survey and environmental reports reviewed and any issues
addressed (see appendices A and B for a checklist of the items that
should be covered in these reports.
KEY INFORMATION (4/5)
Legal, tax and finance / comparables
CHECKED
N/A
COMMENTS
CHECKED
N/A
COMMENTS
LEGAL
• Legal report reviewed and any issues
addressed (see appendix C for a checklist of
the items that should be covered in the report.
TAX
• VAT election / status (TOGC)
• Stamp duty status
• Corporate tax
• Trade tax
• Property tax
FINANCE
• Where applicable, the finance issues listed in
appendix D have been considered and
addressed.
RENTS
• Recent open market transactions and reviews
• Competing supply and quoting terms
YIELDS
• Summary of recent market transactions
• Comparable transactions
KEY INFORMATION (5/5)
Projection assumptions
CHECKED
GENERAL
• Analysis period (minimum five years)
• Inflation rate assumptions
REVENUE
• Analysis of passing rents
• Market rents ()ERV analysis)
• Rental growth rates
• Parking and other income
• Service charge shortfall and period
• Insurance shortfall and period
• Marketing budget
• Renewal / relet terms
• Rent free assumptions
• Legal and agent fees
CAPITAL EXPENDITURE
• Capital improvement budgets
• Tenants’ improvement assumptions
REVIEW
• Projection checked by strategy research group
N/A
COMMENTS
BUILDING SURVEY REPORT (1/4)
- Appendix A -
Structural and Architectural Systems
CHECKED
Foundations
Floor construction and loading
Roofs
Decks / balconies
Exterior walls
Window systems / skylights
Window washing system
Cradles, gantries and access systems
Site landscaping / topography / drainage
Rainwater disposal systems
Parking areas / decks / garages / spaces
Other paved areas
Truck docs / loading areas
Lifts / escalators
Stairs
Lobbies
Corridors
Plumbing systems
Toilet rooms
Deleterious materials (asbestos)
As built drawings and specs
N/A
COMMENTS
BUILDING SURVEY REPORT (2/4)
Mechanical systems / fire protection / warranties and guarantees
CHECKED
N/A
COMMENTS
CHECKED
N/A
COMMENTS
CHECKED
N/A
COMMENTS
Equipment (heating and cooling)
Air distribution
Temperature control
Ventilation
Energy management
Building management system (and software)
Licences and copyright for BMS software
Fire detection and alarm systems
Smoke evacuation / stair pressurisation
Fire standpipes / hydrants
Wet and dry risers
Sprinklers
Hose reels
Fire certificate
Ownership of fire escape routes
Warrantees and/or guarantees
BUILDING SURVEY REPORT(3/4)
Electrical systems / Regulatory compliance & health and safety / Maintenance and building services
CHECKED
N/A
COMMENTS
CHECKED
N/A
COMMENTS
Transformers (ownership)
Security systems (CCTV)
Communications system
Fibre optics / broadband
Health and safety compliance / risk assessments
Construction (design and management) regulations
Emergency procedures manual
Accessibility regulations (disability compliance)
Pending legislation
CHECKED
Service contracts
Maintenance handbooks
Maintenance repair logs
5 Year planned maintenance programme
N/A
COMMENTS
BUILDING SURVEY REPORT (4/4)
Insurance / overall comments
CHECKED
N/A
COMMENTS
Replacement cost valuation
OVERALL COMMENTS ON THE BUILDING SURVEY REPORT
ENVIRONMENTAL REPORT
CHECKED
• Site characteristics and adjoining
sites
• Prior uses
• Remediation works
• Surrounding uses / hazards
• Desk top study
• Contaminated land register
• Prior investigation reports
• Warranties
• Storage tanks / pipelines
• Soil contamination
• Groundwater contamination
- Appendix B N/A
COMMENTS
LEGAL REPORT
- Appendix C CHECKED
• Tenure
• Title
• Rights / covenants / encumbrances
• Searches
• Pre contract enquiries and replies
• Leases (head leases and occupational leases)
• Planning
• Insurance
• VAT
• Construction leases
• Form of contract
N/A
COMMENTS
FINANCE ISSUES
- Appendix D CHECKED
DEBT
• Debt commitment in place
• Debt examination (if debt assumed in purchase)
CURRENCY RISK
• Hedging programme in place
ACCOUNTING / OTHER
• Structure issues (cash flow guarantees etcetera)
• Partnership agreements
• Accounting opinion
• Corporate review (company purchases)
N/A
COMMENTS