Due diligence on real estate in other states?
Given CV, it's impossible to travel to do due diligence on some properties we are thinking of acquiring. One large, private company with very good credit has \~5 years left on the lease, and although I like the fundamentals of the deal and the market, I want to make sure they're planning on exercising their options. I'm less worried about their financial health and more that they want to expand and need a larger building as they've been expanding like crazy since getting bought by a PE fund. Any tips on this situation?
[{"id": "fmrd9pk", "text": "I sell single tenant net leases assets all over the Nation. Most of that kind of DD can be done in the background and without a physical visit. Outside of that, we\u2019ve been coordinating live video tours or video recordings. Many of our investors purchase these assets without ever physically seeing the property. Some investors though still always want to physically see property, which is going to make purchasing difficult for them. PM me if there\u2019s a more specific way I might be able to help on the DD side.", "replies": [], "depth": 1}, {"id": "fmrgcmc", "text": "CoStar May have some decent data for you. Plenty of DD to be done via google too. Lots of market analysis reports put out by Colliers, or whatever form. Tenant is private so no financials to review, but you can see why you can find online.\n\n5 years left is risky though. Can the building be repurposed fairly easily? Is it in a desirable location? Growing city? Right part of town?", "replies": [{"id": "fmu4wqe", "text": "Yeah sub 100 psf, major but secondary market, industrial and plenty of business around", "replies": [], "depth": 2}], "depth": 1}, {"id": "fmvzu1q", "text": "Agree, video recording. Sounds like OP may not have a local broker - I get it, I normally don't use them on the acquisition side - but consider getting one-off representation for this project, and have them tour &amp; record facilities, neighborhoods etc. \n\nBigger picture - in this macro environment, how do you think you can get any comfort or certainty around them staying in the building five years out? Obviously its an issue to aggressively explore on short expirations, but it seems like a long time out to \"make sure they're planning on exercising their options\". You might see a lot of vacancies and distressed assets in the next 6-18 months, depending on the market and sector breakdown of businesses.", "replies": [{"id": "fmwpvgf", "text": "Renters are a $1B+ company, its a regional headquarters, is in the trucking business, and it has a corporate guarantee from them. I'd be surprised if they shut it down in the next 18 months but in some ways if they were going to leave, doing that and then paying out the lease would be better for us!", "replies": [{"id": "fmxbn06", "text": "Nice! I guess what I was more hinting at is, you don't know what will happen in the buildings around you etc. If that was the purpose for scoping out the area now.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]