The Essential Checklist for Successful CRE Closings

2022 has so far proven to be another robust year for the commercial real estate (CRE) market, although rising interest rates and rapidly escalating inflation levels have created additional headwinds for investors on top of the uncertainty brought on by the pandemic and its economic fallout. However, flexible investors, owners and asset managers who put a heavy emphasis on research and finding the right market positioning are poised to profitably navigate the CRE landscape of 2022.

While industrial assets were the darling of CRE investment in the previous year and multifamily holdings generated heightened interest, investors are expected to pursue niche opportunities in other sectors as well, including office, coworking, retail and hospitality properties, as these asset classes restabilize to current demand and market conditions.

To that end, successful CRE deals in 2022 require a heavy emphasis on convenience and strict adherence to key steps such as a detailed plan for portfolio building and management, analyzing the local market to determine the right price and the financial viability of a property, open and clear communication between all parties involved, accurate budgeting and working with trustworthy, experienced professionals.

Map Out a Clear Plan

Although the CRE industry continues its path to post-pandemic recovery, property owners, operators and asset managers need a comprehensive investment strategy to navigate the still-volatile landscape of CRE. A detailed but flexible plan is especially important for assets that have been more significantly impacted by the fallout of the pandemic, such as office properties.

The key to a successful transaction, a secure investment strategy in 2022 builds on a foundation of flexibility and adaptability upon which all next steps are centered. That adaptability involves factoring in potential delays into timeline estimates from the start. Similarly, after the asset types that align with portfolio and performance goals have been identified, CRE players need to strategize not only for a primary plan of securing their target deal, but also line up several contingency plans should the original investment fall through.

Leverage Precise Comparables

Accurate comparables are an essential part of making data driven CRE decisions, such as researching and analyzing transaction opportunities and estimating financing needs and options for a deal.

Running comprehensive comparables can involve a host of valuation methods and requires comparative analysis of a variety of data points and property specs, including:

  • Asset class and location tier
  • Building square footage and lot size
  • Year built, past and potential renovations
  • Property characteristics and lot details
  • Zoning type and nearby area designations
  • Recent deals in the area involving similar properties
  • Most recent sale prices
  • Occupancy and turnover rate

Essential valuations are also needed before committing to a CRE deal and must include comparable net operating incomes and gross income, cash flow details, cap rates and cash-on-cash returns, among others.

Analyze the Target Asset’s Financial Viability

Before committing to an investment opportunity, it’s vital to assess a property’s past and current revenue, as well as its future revenue-generating potential.

Considering that any new owner will be contractually bound by in-place leases, a thorough analysis of current rent rolls is vital, as is securing copies of all existing leases and proof of currency on payments — usually done through estoppel certificates.

Would-be buyers also need to track down maintenance and service records to evaluate potential expenses for repairs and upgrades, review income and expense statements as well as tax returns.

Dedicate Time for Budgeting

While investors should always draw up financial and planning contingencies for unexpected expenses, accurate budgeting is nevertheless vital for a successful CRE deal and a positive ROI.

Estimating and budgeting for renovation, upgrade or additional development costs will afford a solid basis for determining overall expenses, especially since these costs tend to represent the lion’s share of expenditures in a sale outside the actual sale price. Moreover, these estimates play an essential role in securing financing for a deal, as well as the size, type and channels for financing that can be secured for a deal.

Employ Skilled CRE Professionals

Working with an experienced CRE broker smooths out the entire deal-making process from setting up a solid investment plan to confidently navigating the negotiation process. Skilled brokers can also establish realistic deadlines and smoothly adjust timelines to unexpected delays and complications. Additionally, experienced brokers have a vast network of connections and industry players and can bring off-market assets and deals to the table.

Prioritize Timely Communication

With a multitude of moving parts that include not only sellers, buyers and brokers, but also third parties like appraisers, lenders, surveyors, architects, contractors and various other vendors, clear and timely communication is essential to a smooth deal making and closing process. All involved parties need to be current on a deal’s status, details and any potential adjustments, changes and delays.

As such, all involved parties need to prioritize clear and timely communication. Not only does this minimize the chances of complications, miscommunication and delays, but also provides an avenue to exchange innovative ideas and observe new strategies to enhance not only the deal in question, but also upgrade future deals as well.


Although CRE transactional activity remains strong in 2022 and investors continue to look for opportunities to invest capital accrued in previous quarters, the headwinds of rising inflation and interest rates pose additional challenges to industry players. To successfully and profitably navigate another year of shifting market dynamics, owners, asset managers, portfolio managers and investors will need to continue to work on identifying unique opportunities and exploit them with tailor-made, precisely planned strategies to secure successful CRE deals.

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Eliza Theiss

Eliza Theiss is a senior writer reporting real estate trends in the US. Her work has been cited by CBS News, Curbed, The Los Angeles Times, and Forbes among others. With an academic background in journalism, Eliza has been covering real estate since 2012. Before joining PropertyShark, Eliza was an associate editor at Multi-Housing News and Commercial Property Executive. Eliza writes for both PropertyShark and CommercialEdge. Reach her at [email protected]

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