Other general mechanical items that need to be examined include elevators, HVAC systems, security systems, fire sprinkler systems and telephone systems. Get a copy of the roof warranty, if available. If the document is not available, have the roof professionally inspected.
Your due diligence should also include a thorough interior inspection. Look for any problems you’ll have to fix in the coming years. Watch for water or fire damage or vector issues. Some fire departments will conduct a free inspection to verify the building meets current municipal codes. If possible, casually speak with some of the tenants without disclosing your identity and intentions. You don’t want to unnecessarily alert anyone to a pending sale. In short, leave no stone unturned.
What Really Matters
The primary and most important result of thorough due diligence is a smooth and uncomplicated financing and closing of the property. A secondary benefit will be your industry reputation. When you go to market with your next property, your track record will speak for itself, and investors will have a level of comfort with the due diligence information you provide.
Finally, I always recommend the seller and/or buyer consult with legal and financial advisors to confirm due documentation is acceptable for either party. This discussion is only intended as basic coverage of due diligence mechanics.
Stephen I. Grossman is a senior vice president with Lee & Associates, Newport Beach Inc., which specializes in self-storage brokerage. Grossman has been responsible for the sale of more than 800,000 buildable square feet of entitled self-storage land and the sale or escrow of more than 3 million square feet of existing self-storage facilities. For more information, call 949.724.4709; e-mail firstname.lastname@example.org.