What Buyers Should Evaluate Beyond the Offering Memorandum
Offering memorandums are designed to present an opportunity in the best possible light. Buyers should use them to understand the story, but not as a substitute for independent evaluation.
Operating performance
Review the assumptions behind income, expenses, vacancy, concessions, capital needs, and future rent growth. Small changes in assumptions can materially affect value.
Physical condition
Deferred maintenance, roofing, mechanical systems, life-safety items, paving, drainage, and exterior conditions can create near-term cash requirements that are not obvious in the marketing materials.
Tenant and lease risk
Consider lease rollover, tenant credit, occupancy costs, renewal probability, and any concentration of income among a small number of tenants.
Execution requirements
Value-add opportunities often depend on leasing, construction, vendor coordination, or operating changes. Buyers should evaluate whether the business plan is realistic and whether the right resources are available to execute it.
Local context
Submarket demand, access, competing properties, future development, and local operating conditions should all be considered before finalizing the investment thesis.