In today’s fast-moving market, being prepared to pivot quickly towards a sale is more relevant than ever. How can you prepare assets to streamline property transactions in today’s market?
Here, is the first part of our series on getting assets sale-ready to streamline the sales process. We consider some of the construction-related issues.
It all begins with data & docs
Data collection for any site is the starting point of getting the asset ready for sale and often informing pricing. Our building consultancy teams typically undertake audits and collate construction data and documentation, initially using questionnaires where relevant. Having a clear asset history, the data suite should encompass comprehensive records of refurbishment or construction projects. Documentation for any works completed within the last 12 years should be easily accessible from an updated data site.
A non-negotiable aspect is the inclusion of a pre-agreed core of assignable documents. These documents, such as appointment documents and building contracts, should be standard practice at the execution stage.
The full data-suite of complete records gives confidence. When our teams encounter a new property, they can effectively conduct gap-analysis studies. This ensures all required documentation is in place and audited.
How can vendor surveys expedite the sale-ready process?
To streamline the transaction process, many owners are increasingly commissioning vendor surveys. Vendor surveys – which Workman carried out across more than 3m sq. ft of assets during the past year – are a key element of quick and reliable transactions, helping to expedite the sale-ready journey.
Often undertaken by commercial property owners prior to selling a building, vendor surveys are objective building surveys of properties intended to satisfy the due-diligence requirement of prospective purchasers, avoiding the need for them to conduct their own surveys, thus streamlining the sale and purchase process. As experts in Technical Due Diligence, our teams of chartered surveyors are aware that vendor surveys can fast-track the purchase process. Where some purchasers prefer to carry out their own surveys, our RICS chartered building surveyors will field and manage incoming queries as part of our Client Representation service.
Don’t just provide the history: look to the future too
If getting an asset sale ready means being able to demonstrate the construction history of a building, it should also consider the future.
A high-quality vendor survey will consider future building fabric and M&E works required to meet statutory obligations identified within existing Planned Preventative Maintenance (PPM) programmes. Where a PPM falls short, our teams can devise robust plans. The vendor survey should also highlight the difference between service charge and capex works, thereby giving extra clarity on the purchaser’s obligations. We work closely with property management teams to identify and evaluate these future costs for any purchaser.
It’s short-sighted to prepare commercial property for sale by only providing technical building consultancy expertise; data around issues such as EPC ratings, fire safety, and health and safety, must also be provided, demonstrating a holistic representation. The coordinated property management and technical approach shows a joined-up partnership vision, borne out of Workman’s cross-functional background and collaborative expertise.
Commercial advice to support the initial survey
Inevitably, vendor surveys are thoroughly interrogated by purchasers’ advisors. Typically, we operate a peer-review process of vendor surveys on behalf of purchasing clients, inspecting a property to complete a thorough review of it to identify any gaps, or carry out research to check costs.
This results in a need for surveyors to engage in effective discussions with purchasers. They should respond to enquiries about the building’s history. Furthermore, they need to provide explanations for the reasoning and costs behind recommended works.
For this reason, where we have had a longstanding involvement in a building and its occupiers, our teams are in a much stronger position to provide the level of insight for purchasers than a surveyor who has only been brought in just to do the vendor survey. Historical involvement adds breadth and depth to the survey, providing a more holistic view of the building’s situation.
Evaluate real cost credibility
It’s obviously important that all costs included in vendor surveys are as accurate as possible. Costs of works outlined in our vendor surveys are common-sense-checked against actual projects that have already been tendered or negotiated to similar assets, rather than applying generic cost indices.
Given the short timescales that vendor surveys are often required, the bank of information at our fingertips provides a positive benefit for purchasers and vendors who would otherwise be reliant on book prices rather than live data.
Give comfort: draw up letters of reliance
A purchaser needs to know they can rely on the advice contained within the vendor survey, and that they have recourse if there’s an issue. This process is guaranteed through letters of reliance, without which the vendor survey is of little value. Therefore, it is crucial to secure these agreements well in advance to prevent transaction delays.
For Part 2 of our sale-ready series, we delve into the management issues that require attention.