October 20, 2022

10 Things to Consider When Buying an Older Building

There are many things to consider when pursuing an older building. The Element team has unique expertise when it comes to ensuring a smooth process for you and your asset.

1. Physical Condition of Your Asset: due diligence is your first step once you find the building you’re looking for. What is the condition of the building? 

2. Environmental Conditions: are there potential or documented issues from prior users of the building? Note that environmental testing will need to be done. Are there issues with the building or surrounding buildings? Vapor, petroleum, lead, and asbestos may slow the acquisition process.

3. What is your pre-development budget? What are the results of your building condition assessment? What is your plan to address costs like deferred maintenance or planned improvements? 

4. If Environmental Concerns are Present: What is the cost to mitigate and who is going to pay for it? For example, a vapor mitigation system could cost tens of thousands of dollars. Is this the sellers’ responsibility? Are you going to try to obtain grant funding to cover the expenses?

5. Assessing Building Systems: What is the useful remaining life of the existing building systems? What improvements will you need to make to support your business or your multi-tenant investment plan?

6. Due Diligence Timeframe: Are there issues which can extend due diligence time? What are the time requirements of your purchase agreement? What are the delivery requirements of your lender? Approval time for financing and environmental testing is likely to extend this.

7. Existing Contracts: What are the existing service contracts? These may include maintenance, trash, snow removal, etc. What services do you want to continue, what do you need to cancel?

8. Are you planning to reposition or rehab your building after acquisition? The Element team, through its many previous projects and relationships in the industry, will find the right architect, construction services, and contractors for your project. 

9. Is your Building Located in a Historic District? The selection of an architect, for example, will be vital in relation to the renovation of your asset. Are you eligible for any special financing tools?

10. Do You Have the Right Team? At Element, we are dedicated to keeping your project on course. Our years of experience and expertise helps us customize and cater your project to best suit your needs. 

Do you have a big, bold vision? Give Element a call today!

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