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Can Due Diligence Increase Certainty of Closure?

The way you and your consultant address red flags encountered during the due diligence process can have a great impact on the success of your deal. Frank Romeo discusses some proactive and reasonable approaches that will allow you to get in front of red flags and adequately manage risks and liabilities while increasing certainty of closure.

By Frank Romeo | Updated on May 20, 2015

It’s no secret that due diligence is seen by some in the commercial real estate industry as a necessary evil – you can’t do without it, but the process has potential to uncover unpleasant surprises at a property.  For example, the environmental site assessment might identify a potential environmental concern, or worse documented contamination at a site you believed to be clean, or a property condition assessment may uncover the need for a major capital expense that was previously unidentified. 

Finding issues is never fun, but not all of them will necessarily create a road block to the completion of your deal. The way you and your consultant approach the issues you encounter can have a big impact on the success of your deal.  A targeted due diligence process will help identify issues early, determine how much it might cost to cure, and whether any alternatives to remediation or containment are available.  It’s a critical piece in assessing whether a deal can and should go through.

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