DUE DILIGENCE CHECKLIST EXAMPLE Due Diligence Checklist bij

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DUE DILIGENCE CHECKLIST (EXAMPLE) Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

DUE DILIGENCE CHECKLIST (EXAMPLE) Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

KEY INFORMATION (1/5) Leasing / covenant strength CHECKED N/A COMMENTS § Lease lengths and

KEY INFORMATION (1/5) Leasing / covenant strength CHECKED N/A COMMENTS § Lease lengths and breaks / notification § Passing rents § Repairing obligations § User § Alienation § Insurance – responsibility and cover (advise insurers) § Rent review provisions § Servitudes § Rent free periods, other tenant incentives § Calculation of effective rent § Property management / utilities / service charge § Indexation § Leasing / marketing plan § Tenant disputes • Tenant financial statements / credit reports • Tenant payment history • Rent deposit list • VAT status • Potential liabilities for investor in case of bankruptcy covered Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

KEY INFORMATION (2/5) Areas and physical / planning and use CHECKED N/A COMMENTS •

KEY INFORMATION (2/5) Areas and physical / planning and use CHECKED N/A COMMENTS • Location description • Plans of accommodation / site and location • Net/gross areas (BGF/NGF/GIF), confirmed by independent measurement • Ceiling heights (finished and slab to slab) / eaves height • Heating and cooling systems / sun protection / cabling standard • Site cover and site density versus building permission • Parking and adequacy for use / potential penalties • Permitted use / consents • Zoning / development plans • Listing / conservation areas • Cadastral plan • Property registry excerpts Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

KEY INFORMATION (3/5) Expenditure and building management / building survey and environmental reports CHECKED

KEY INFORMATION (3/5) Expenditure and building management / building survey and environmental reports CHECKED N/A COMMENTS EXPENDITURES • Service charge statements and capital expenditures • Current budgets (service charges and landlord expenses • Reserve funds • Insurance premiums • Rateable values and rates payable MANAGEMENT / STAFF • Building staff and employment terms / contracts • Building survey and environmental reports reviewed any issues addressed (see appendices A and B for a checklist of the items that should be covered in these reports. Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

KEY INFORMATION (4/5) Legal, tax and finance / comparables CHECKED N/A COMMENTS LEGAL •

KEY INFORMATION (4/5) Legal, tax and finance / comparables CHECKED N/A COMMENTS LEGAL • Legal report reviewed any issues addressed (see appendix C for a checklist of the items that should be covered in the report. TAX • VAT election / status (TOGC) • Stamp duty status • Corporate tax • Trade tax • Property tax FINANCE • Where applicable, the finance issues listed in appendix D have been considered and addressed. RENTS • Recent open market transactions and reviews • Competing supply and quoting terms YIELDS • Summary of recent market transactions • Comparable transactions Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

KEY INFORMATION (5/5) Projection assumptions CHECKED N/A COMMENTS GENERAL • Analysis period (minimum five

KEY INFORMATION (5/5) Projection assumptions CHECKED N/A COMMENTS GENERAL • Analysis period (minimum five years) • Inflation rate assumptions REVENUE • Analysis of passing rents • Market rents ()ERV analysis) • Rental growth rates • Parking and other income • Service charge shortfall and period • Insurance shortfall and period • Marketing budget • Renewal / relet terms • Rent free assumptions • Legal and agent fees CAPITAL EXPENDITURE • Capital improvement budgets • Tenants’ improvement assumptions REVIEW • Projection checked by strategy research group Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

BUILDING SURVEY REPORT (1/4) - Appendix A - Structural and Architectural Systems CHECKED N/A

BUILDING SURVEY REPORT (1/4) - Appendix A - Structural and Architectural Systems CHECKED N/A COMMENTS Foundations Floor construction and loading Roofs Decks / balconies Exterior walls Window systems / skylights Window washing system Cradles, gantries and access systems Site landscaping / topography / drainage Rainwater disposal systems Parking areas / decks / garages / spaces Other paved areas Truck docs / loading areas Lifts / escalators Stairs Lobbies Corridors Plumbing systems Toilet rooms Deleterious materials (asbestos) As built drawings and specs Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

BUILDING SURVEY REPORT (2/4) Mechanical systems / fire protection / warranties and guarantees CHECKED

BUILDING SURVEY REPORT (2/4) Mechanical systems / fire protection / warranties and guarantees CHECKED N/A COMMENTS Equipment (heating and cooling) Air distribution Temperature control Ventilation Energy management Building management system (and software) Licences and copyright for BMS software Fire detection and alarm systems Smoke evacuation / stair pressurisation Fire standpipes / hydrants Wet and dry risers Sprinklers Hose reels Fire certificate Ownership of fire escape routes Warrantees and/or guarantees Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

BUILDING SURVEY REPORT(3/4) Electrical systems / Regulatory compliance & health and safety / Maintenance

BUILDING SURVEY REPORT(3/4) Electrical systems / Regulatory compliance & health and safety / Maintenance and building services CHECKED N/A COMMENTS Transformers (ownership) Security systems (CCTV) Communications system Fibre optics / broadband Health and safety compliance / risk assessments Construction (design and management) regulations Emergency procedures manual Accessibility regulations (disability compliance) Pending legislation CHECKED N/A COMMENTS Service contracts Maintenance handbooks Maintenance repair logs 5 Year planned maintenance programme Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

BUILDING SURVEY REPORT (4/4) Insurance / overall comments CHECKED N/A COMMENTS Replacement cost valuation

BUILDING SURVEY REPORT (4/4) Insurance / overall comments CHECKED N/A COMMENTS Replacement cost valuation OVERALL COMMENTS ON THE BUILDING SURVEY REPORT Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

ENVIRONMENTAL REPORT CHECKED - Appendix B N/A COMMENTS • Site characteristics and adjoining sites

ENVIRONMENTAL REPORT CHECKED - Appendix B N/A COMMENTS • Site characteristics and adjoining sites • Prior uses • Remediation works • Surrounding uses / hazards • Desk top study • Contaminated land register • Prior investigation reports • Warranties • Storage tanks / pipelines • Soil contamination • Groundwater contamination Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

LEGAL REPORT - Appendix C CHECKED N/A COMMENTS • Tenure • Title • Rights

LEGAL REPORT - Appendix C CHECKED N/A COMMENTS • Tenure • Title • Rights / covenants / encumbrances • Searches • Pre contract enquiries and replies • Leases (head leases and occupational leases) • Planning • Insurance • VAT • Construction leases • Form of contract Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten

FINANCE ISSUES - Appendix D CHECKED N/A COMMENTS DEBT • Debt commitment in place

FINANCE ISSUES - Appendix D CHECKED N/A COMMENTS DEBT • Debt commitment in place • Debt examination (if debt assumed in purchase) CURRENCY RISK • Hedging programme in place ACCOUNTING / OTHER • Structure issues (cash flow guarantees etcetera) • Partnership agreements • Accounting opinion • Corporate review (company purchases) Due Diligence Checklist bij Handboek Vastgoedmanagement © Noordhoff Uitgevers, Groningen/Houten