Underwriting review

Background - Engaged by a national real estate investment firm to review their underwriting assumptions on a 1.4m sf office and retail tower in a major downtown CBD. 

Challenge - The presence of asbestos throughout the building complicated the underwriting of this large transaction.  The building had been partially abated on a floor-by-floor basis as tenants rolled or were relocated.  Careful review was needed to ensure that underwriting properly accounted for future abatement costs and timing as well as the traditional underwriting assumptions and metrics.

Results - Review of the Argus underwriting revealed several logical inconsistencies and erroneous assumptions that cumulatively impacted the cash flow by several million dollars.  The client was able to renegotiate the purchase price with the seller.