Acquisitions
Acquisitions are focused on achieving their comprehensive yield goals in terms of both annual cash flow requirements and overall return. Utilizing its existing international list of property owners and brokers, the firm’s personnel search continuously through the Florida market for commercial property that can be purchased at values reflective of the property’s and the market’s current condition. Once identified, the team negotiates the purchase contract in exhaustive detail.
Then, the team embarks on completion of its complex due-diligence procedures and economic feasibility studies, including:
- Obtaining a structural/engineering review.
- Obtaining an environmental analysis.
- Reviewing or obtaining and reviewing the property’s survey.
- Reviewing each lease in detail and preparing an abstract.
- Reviewing the property’s operating statements in detail.
- Performing a market rent study.
- Reviewing all existing contracts encumbering the property.
- Reviewing the market and/or aerial photos of the trade area to determine the sites for potential competition.
- Meeting the appropriate State, County and City transportation officials to obtain information on any transportation construction projects planned in the immediate area during the next decade.
- Obtaining appropriate zoning information to determine the property’s current zoning classification; that the existing uses are allowed and proposed uses that may be included.
- Meeting with various public agencies and entities to obtain current information on the specific community’s path of progress and direction of growth.
Upon completion of the above procedures, the financial projections are reviewed for accuracy, and fine tuned where necessary. If a purchase price adjustment is warranted, the contract price is renegotiated or the contract is terminated. The acquisition is then closed, and management duties are commenced.
Dispositions
While the majority of sellers believe that the time to focus on disposing a property is in its sale year, M2 believes that selling a property requires long term planning; the key to maximizing value. Significantly in advance of the intended sale date, a disposition strategy is created and implemented. This plan includes capital improvements to enhance aesthetics, weeding out weak or poorly performing tenants and structuring new and renewal leases in a manner to maximize long-term property value.
To determine value, financial projections are compiled and market research is conducted to determine buyer’s current yield requirements. After this information has been obtained, a value at the upper end of the yield curve is established. With this value determined, a comprehensive sales package is assembled. This package is disseminated first to the firm’s clients and known qualified buyers. After a short preference period, the package is disseminated to an international group of brokers who are highly skilled and able to generate qualified purchase offers.
Upon acceptance of an offer, the disposition team works closely with the purchaser’s professionals to provide all information required to close the sale as quickly as possible. Upon closing, the team continues to work with the assorted professionals to complete a smooth transition and efficiently conclude the property’s operations.
