In today’s fast-moving market, being prepared to pivot towards a sale, or sale-ready, is more relevant than ever.
Workman-managed assets are kept at the highest standards year-round by our on and off-site property management teams. However, when a transaction is on the horizon, our teams challenge themselves to help ensure the property is sale-ready – both financially and on the ground.
Following our previous article on the construction-related issues in getting assets sale-ready, this article considers some of the property-management-related measures we take to get assets sale ready:
Start with rent collection
Perhaps the most important property management element when preparing any property for sale is rent collection and dealing with arrears. The transaction process often begins with a Commercial Property Standard Enquiry, so whenever an asset is getting ready for sale, our teams ensure that the arrears picture is fully up to date and the reasons for any arrears are understood. If there any disputes, we document the reasons and help formalise payment plans through side letters agreed via a solicitor.
Document service charges efficiently
The status of any service charge also plays a major part in any purchaser’s due diligence, so we make sure that:
- All historic reconciliations should be completed in accordance with the RICS guidelines.
- If approaching the year end, any budgets for the following year need to be set, with a clear rationale for planned expenditure, which will be interrogated by the purchaser’s due diligence process.
- Actual expenditure versus budget for the current year should be detailed, while anticipating potential purchasers’ queries on any significant over- or under-spends.
- Progress with budgeted projects or planned preventative maintenance works within the current year should be detailed and communicated.
- Any service charge disputes or queries from occupiers should be dealt with and reconciled so the site can be handed over to the new owner as efficiently as possible.
By being as transparent as possible on service charge regimes, our property management teams enable smoother transitions.
Check the utilities
Consideration of utilities is especially important at this time of rapid cost increases. Our teams ensure that up-to-date meter readings are regularly taken, occupier recharges are up to date, with competitive market contracts in place.
Where actual expenditure varies extensively from what was originally budgeted, (inevitable given the volatility of the energy markets over the last 12 months), it’s important to communicate regularly with occupiers to pre-empt queries and delays in payment. Being able to demonstrate a level of pro-active engagement with occupiers will reassure prospective purchasers that they’re not inheriting potential disputes.
While we seek to continually maintain all assets to the highest standards, once an asset has been earmarked for sale, there is an added focus on attention to detail, ensuring the site presents in the best possible light. At this point, no stone is left unturned.
Additional inspections and on-site reviews with key suppliers can quickly identify and remedy items requiring attention, from; minor items of redecoration, additional landscaping or one-off cleans, for example. In addition to practical action onsite, there are other associated administrative tasks to check to ensure the asset presents well, for example that all health & safety audits are up to date. Our teams’ attention to detail ensures that sites present well – both on paper and in real life.
Minimise disruption to the asset
When an asset is identified for sale, inevitably there are agents, photographers, investors, and building surveying inspections, which can all be quite disruptive to the day-to-day operation of a site.
For our property management teams, it’s all about minimising disruption to the occupiers, supporting them, and maintaining business-as-usual as possible. This should allow occupiers to continue with the operation of their day-to-day businesses while the transaction proceeds.
Support the transfer of people
For any employees based onsite who are subject to TUPE, it can be an unsettling time. Our teams consult with these employees sensitively and are supported by the Workman HR team to ensure that where their employment is transferred from one employer to another, the move is as smooth and reassuring as possible.
Again, this is a standard aspect of any purchaser’s due diligence, so preparation of all associated employment documentation in advance, such as job descriptions and ELI information, will pay dividends.
Keep a ‘ready-for-sale’ checklist
Our ‘Ready for Sale’ Checklist is a simple and effective tool for making sure all the preceding points are thoroughly considered and confirmed to the client – along with detailing the action holder for each item. It allows the client, agents, and solicitors to see at a glance what information and documentation has been provided, and what is outstanding.
By being as transparent as possible – and by being empathetic enough to place ourselves in the purchaser’s position – we can pre-empt many of their queries to avoid inconvenient and costly delays to the sale process.