The most important lesson learned in 2015 was to be very careful when choosing a counterparty for a prospective deal. We unfortunately experienced the perfect example of just how hard (or easy) a transaction can be depending on the professionalism of those involved.
Out of the 19 real estate investment deals executed by Greenridge during 2015, two were in many respects very similar. The acquisitions constituted the entire capital of two offshore entities, each owning a single investment property. Both properties were let to strong tenants with just under 10 years left on the leases. Transaction values were also comparable at around £70m and £80m respectively.
But there the resemblance abruptly ended. One transaction sailed through to exchange of contracts in just nine working days with the other dragging painfully along for six months. The reason was very simple. One seller was efficient, committed and honest throughout whereas the other came to the table fickle, unprepared and difficult!
The take away from this for the seller is always be ‘sale ready’ including searches, technical due diligence reports and a full legal pack. This will not only make the process more efficient but will also very quickly flush out the intentions of any potential buyers.
And buyers beware: if the seller seems difficult at the start, the process is likely to be tortuous through to completion and perhaps beyond. So choose your counterparty as carefully as you choose your target acquisitions.
Good luck in what promises to be a busy year ahead.