34
March | April | 2016 Commercial Investment Real Estate
Operations assessment may
be the icing on the cake.
Adding
Value
by Jeff Yetter, CCIM, LEED-AP
T e due diligence process focuses on identifying build-
ing def ciencies and managing f nancial risk. A typical
property condition assessment uncovers these def cien-
cies and includes capital reserves for building repairs and
upgrades that can impact the negotiation process.
While identifying building deficiencies is a critical
component of due diligence, evaluating building opera-
tions may reveal additional risks and opportunities that
are not captured in the property condition assessment.
Analyzing benchmarked utility data and underwriting
low-cost operational improvements are two strategies that
can reduce your client's f nancial risk and quickly increase
net operating income and asset value.