The Importance of Real Estate Due Diligence in M&A Transactions

Real estate typically plays a part (from ancillary to integral) in nearly every asset purchase, stock purchase or merger transaction. Therefore, it is important to understand what due diligence might be required for the real estate assets involved in the transactions and the potential risks of not performing that due diligence.

Real estate due diligence consists of conducting specific research and investigation on the real property assets so that the parties can (i) account for real estate risks in decision-making processes, (ii) modify the deal structure to resolve real estate issues, (iii) account for diligence items requiring significant lead time in the deal timeline and (iv) identify potential costs required for a successful closing.