Detailed and Insightful
Scalable and cost effective Buy & Sell Side financial due diligence
How we deliver for you
NTrust’s team of experienced due diligence specialist can also provide comprehensive financial due diligence and Agree Upon Procedures analysis to help identify and manage financial risk.
BUY SIDE & SELL SIDE
DUE DILIGENCE &
The commercial real estate due diligence process demands experience and expertise, which not all CRE companies have in-house. Buying this expertise can be fairly expensive. Vendors in this space range from law firms (read high price tag) to abstractors with solo practices (read variable quality). And many of these vendors are not built to scale well, so turnaround time can easily become an issue. So, when selecting a vendor, it pays for you to perform some due diligence on them.
Some of the questions you should ask:
“How do you efficiently and accurately validate the seller’s data?”
“What is your process for doing this with limited documents?”
“What kind of volume can you handle and what kind of turnaround times should be expected?”
What you want to hear from you vendor is that they have experience streamlining the due diligence valuation process. That they verify data by using multiple sources to assure accuracy. And that they can deliver fully abstracted data to your system once the deal closes.
This is exactly what NTrust does. We have developed an approach that lowers the cost, streamlines downstream processes, and improves the quality and breadth of data available to be used in multiple valuation models.
The concept NTrust developed is to “abstract once, repurpose the data for each phase of the valuation process”. By doing this we can deliver significant deal cost savings and also minimize dead deal costs.
This means at the end of the acquisition process, you don’t have to re-abstract data, or to trust data in the current owner’s system and try to map to yours.
Your CRE due diligence process is providing you with freshly abstracted and validated data.
First, NTrust works with the client to evaluate the current tenants in the portfolio(s) to be acquired. Then NTrust identifies the critical and high value tenants most important to the future revenues. The financial data from this group is used to validate the accuracy of seller data, allowing the adjustment of assumptions in the valuation model.
The clause and detailed data are retained in NTrust’s REmaapAI system for future use and reporting. It also allows NTrust to identify and report on all potential gaps in the seller’s data, potential impacts on future revenue, and impacts on future plans for the properties.
With this approach asset managers are now able to use a robust data set to create different valuation models quickly before preparing their bid. It also provides the acquisition team with multiple points of negotiation to help arrive at a successful and profitable deal.
Once the client wins the bid, they typically have a tight time window to complete their full CRE due-diligence. At this point in the process NTrust performs a full abstraction of all the remaining leases. The validated data is used to update the valuation model.
From all the agreed upon data, NTrust then creates a comprehensive Due Diligence Report. This includes tenant-wise details on current and future revenues and any potential future impacts as well as a due-diligence summary memo.
At this phase in the process, NTrust resources transition to working with the client’s lease administration team. Our project managers work on mapping lease abstract data to the property management system and ready data files for upload. In order to be fully prepared for the first billing cycle NTrust extends the abstraction services to cover recovery setup and will compare seller’s recovery against our recovery to identify discrepancies in recoveries. This approach allows NTrust to seamlessly integrate data from the acquisition process into the lease administration and property management processes.
Lease documents and abstracted and mapped lease data are loaded into the client’s system by the NTrust IT team. Then Recovery setup is also configured and validated. And your lease administration team will be ready to execute the first billing cycle
The Bottom Line
NTrust uses an abstract once, and repurpose data for each phase of the abstraction process…saving time and money for both buyer and seller.