July 6, 2016 – Your client wants to invest in real estate. What could possibly go wrong? Plenty. Find the questions that lead to the right answers, in Commercial Real Estate Transactions in Wisconsin, newly updated from State Bar of Wisconsin PINNACLE^®.

You know commercial real estate transactions require due diligence. But you may not know how much diligence is due. The answer is, it depends. As attorney-authors Jesse Ishikawa and Melanie Lee note in Chapter 4:

“Due diligence is never complete. Each investigation turns up more questions that require more investigation. But by the end of the contingency period, the buyer must sit down with all the knowledge it has accumulated and decide whether to close, walk from the deal, or renegotiate the purchase price and terms.”

There may be no absolute answers. But there are necessary questions, a lot of them, all of which help sort the deal-breakers from the acceptable risks. Here are some of those questions.

For All Properties

• Has the property been surveyed?

• Does the survey meet ALTA Standards?

• Who will pay for a new survey, if necessary? Are there exceptions?

• Does the seller have authority to sell?

• Are there protected historical burial sites on the property?

• What was the property used for in the past?

• Are there any recognized environmental conditions (RECs) that will require cleanup?

• How about historically recognized environmental conditions (HRECs) that may require monitoring or future cleanup?

• Are neighboring properties contaminated?

• Are any structures in good shape?

• Is everything in compliance with governmental regulation, including zoning?

• Can the property use be changed or expanded to reflect changing economic conditions?

For Completed, Operating Properties

• Is everything structurally sound?

• Has the property been profitable in the past?

• What about the operating expenses, and such things as maintenance, replacements, and repairs?

• What sort of tenants are there, and are they likely to remain? What sort of businesses?

• What sort of neighborhood?

• What sort of leases exist, and for how long?

• Any special conditions for special tenants?

• What about the personal property that is to be included – is it present and in good condition?

• Is it free and clear of liens and security interests?

Properties Purchased for Development

• Is the property economically feasible for the client’s plans and purposes?

• Has a feasibility study been done?

• Does present zoning permit the planned use?

• If rezoning is contemplated, is there a contingency clause in the sales contract?

• Is the property subject to annexation? Is it likely to be annexed?

• Are soil conditions adequate to support proposed improvements?

• Are utilities available?

• Is it in a floodplain, or does it contain any wetlands?

• Are there present or past pollution and contamination issues that will have to be rectified?

For detailed analysis and discussion of these and many more issues, you need Commercial Real Estate Transactions in Wisconsin.

How to Order

Commercial Real Estate Transactions in Wisconsin is available to members for $179 and to nonmembers for $229, plus tax, shipping, and handling.

As with all PINNACLE books, this volume will be updated regularly, and purchasers who subscribe to automatic supplementation receive future updates at 10 percent off the regular price.

Commercial Real Estate Transactions in Wisconsin is also available via Books UnBound^™. Annual subscriptions to Books UnBound start at $159 per title and $769 for the full library (single-user prices; call for law-firm pricing).

For more information, visit WisBar.org Marketplace or call the State Bar at (800) 728-7788 or (608) 257-3838.