Prior to searching for investment opportunities, an established understanding of what type of asset will best suit our clients’ preferences, needs and capabilities is necessary. An investor’s residence geography may prohibit him or her from finding local assets that generate a reasonable rate of return due to high demand, or may focus on properties deemed less management intensive not having the resources to oversee shared aspects of a multi-tenant holding; these are hurdles KDS Commercial Properties is positioned to assist investors overcome.
Our primary goal is to increase a client’s exposure to available properties based on criteria established in this initial phase and develop a plan that maximizes value and returns of a client’s investment.
Evaluation of Target Offerings
(Underwriting and Due Diligence)
With past experience as employees of development firms, the principals of KDS Commercial Properties have extensive experience performing underwriting, due diligence, and asset management functions from an owner’s perspective. We apply this mindset to better understand the viability of target properties for the benefit of clients and summarize attributes that may negatively affect value and returns. KDS Commercial Properties is positioned to oversee and/or perform underwriting and due diligence functions turn-key on behalf of clients. These functions include:
Conservative financial modeling is utilized to produce anticipated return results of a target property or properties. Historical and potential lease revenues, tax values, and operating and ownership expenses are verified to produce probable cash flow scenarios over a projected hold period. All proformas are independently constructed by KDS Commercial Properties, which are then compared to any seller generated model for the purpose of validating an advertised capitalization rate and listing price.
Detailed .pdf and Excel formatted abstractions are constructed to summarize each occupant’s lease.
Lease Review and Summary Reports
From the abstractions, salient lease provisions more likely to affect returns are queried to form a comparative analysis of each lease side-by-side. Custom reports of targeted provisions can be created at the request of the client.
We set foot on each property as part of verifying the physical condition of an asset and to understand its position within the local market.
Engagement of Professional Services
KDS Commercial Properties will suggest reputable professionals to perform surveys, environmental and property condition assessments, and legal services. If clients prefer, we may also act as a centralized point of contact and engage professionals directly on behalf of investors.
As a product of due diligence, we produce a detailed listing of an asset’s strengths, weakness, opportunities and threats prior to the expiration of the inspection period.
KDS Commercial Properties will assist with review of the financing options and terms obtained by client to ensure the best possible financing structure is utilized to align with the overall investing goals of the client.