The short answer
Commercial due diligence joins the legal income file with the physical and operating asset. Read the lease, tenant, use, fit-out ownership, service costs, vacancy exposure and likely next occupier before accepting a quoted return.
Interrogate the rent
Confirm lease term, payment history, deposit, incentives, breaks, renewal, arrears and each party's obligations. A claimed return should be reconstructed from documents and cash actually received.
Inspect the space as an occupier
Permitted use, licensing, parking, access, lift performance, floor efficiency, fit-out quality and reinstatement cost affect leasing depth. Vacancy converts these from footnotes into owner costs.
- Lease and receipts
- Tenant covenant
- Service-charge budget
- Use and licensing
- Fit-out ownership
- Vacancy and reletting time
Price the interruption
Model the time and money between one tenant and the next. Include marketing, incentives, fit-out or reinstatement, service charges during vacancy and the buyer's likely treatment of any unexpired lease at exit.
Information only. Rates, requirements and building records change. Confirm the current position with the responsible authority and the specific building documentation before relying on a decision.
Make the inputs visible