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BBT SOP

Property Acquisition Setup

Pick Commercial or Residential below. Every tab on the page switches with it. A section without tabs applies to both.

Includes CAM, signage, anchors and tenant analysis.

Work through the phases in order:

  1. Due Diligence: during escrow.
  2. Pre-Close: before close of escrow.
  3. At Close
  4. Accounting: after close.
  5. In Office: after close.
  6. Property Walk-Through
  7. Schedule Vendors

The same checklist is on monday: Property Setup Checklist.

1. Due Diligence

Use during escrow. Tick each item as you get it (ticks save in this browser only), and save every diligence document to the server.

General

  • Year built
  • Current zoning
  • Building size
  • Site size
  • Parking provided

Environmental

  • Phase I report, with consultant contact info
  • Phase II report, with consultant contact info
  • Asbestos and mold sampling
  • Existing environmental report from the Seller
  • Remediation plan (if applicable)
  • Soil sampling

Property

  • Property Condition Report
  • Site plan (scaled blueprint)
  • Site plan and parking plan for the entire project
  • As-built drawings
  • Roof integrity assessment
  • Summary of physical problems and tenant issues
  • Summary of deferred maintenance
  • Color palette for anchor and shops
  • Floor plans and working drawings for every tenant, all buildings
  • Zone code
  • Parking code
  • Location of meters, shut-off valves, timers and controls

Financial

  • Current budget
  • CAM reconciliations
  • Budget by our property manager, set up in AppFolio
  • Schedule of unpaid TIs or LCs (if any)
  • Three-year capital expenditure history
  • Utility invoices, last 12 months
  • Rent roll
  • Management fee reimbursement analysis
  • NNN cap analysis
  • Loan documents, obtained and reviewed

Signage & Leasing

  • Sign bids, and a sign program for perimeter and storefront
  • Sign panel allocation: leasing vs. sale (tenant pro rata share)
  • Lease review for tenants with perimeter sign rights
  • Sign ordinance
  • Sign dimensions and concept drawings
  • Maximum perimeter signage (pylon or monument), assessed by the sign company
  • Lease listing agreement(s) in place
  • Gross sales reports (if available)

Documents & Records

  • HVAC maintenance contracts in effect
  • ADA (CASP) survey
  • Lease abstracts for every tenant
  • Books for rent and CAM billing
  • Complete set of executed leases
  • Pictures, aerials, maps, city profile and promotional materials
  • Litigation claims (if any)
  • Operating budget
  • Income and expense summary, last 3 years
  • Evidence of percentage rent paid

Tenant Analysis

  • Tenant exclusives under the use clause, go-dark and co-tenancy requirements
  • Tenant options, first rights to acquire and early termination
  • Security deposits: total and breakdown
  • Property tax and insurance due by tenant, last 5 years
  • CAM billings by tenant
  • Tenant billing files

Contracts, Permits & Insurance

  • Check ledgers for the last 2 years, reviewed
  • Service contracts and warranties (HVAC, roof, etc.)
  • Existing management agreement
  • CC&Rs
  • Appraisal (if available)
  • Merchants Association (if active)
  • Anchor financial statements (if available)
  • Insurance invoice and policy
  • Permits, Certificate of Occupancy, variances and CUPs (if any)
  • Personal inventory (if any)
  • Brokerage and listing agreements for the transaction
  • 5-year loss history from the insurance carrier

Contact List

Keep the name, firm, phone and email for each role.

  • Attorney (Buyer)
  • Attorney (Seller)
  • Seller’s Broker
  • Buyer’s Broker
  • Leasing Broker (Current)
  • Leasing Broker (Prospective)
  • Mortgage Broker
  • Title Representative
  • Escrow Officer
  • Current Property Manager
  • Environmental Consultant
  • Surveyor
  • Architect
  • ADA Consultant

2. Pre-Close

Complete before close of escrow.

  1. As-builts
    Coordinate with Mario.

  2. Design
    Coordinate with Sam.

3. At Close

  1. Issue the Welcome Letter to all tenants.

  2. Pick up files and keys from prior management or the owner.

  3. Send the Tenant Info Sheet to collect all tenant contact information.

  4. Re-key the building.

  5. Build a Gantt chart / timeline for the full onboarding process.

4. Accounting

Complete after close of escrow.

Banking & AppFolio

  1. Set up the bank account
    Enable ACH and attach a voided check.

  2. Add the bank account to AppFolio
    AppFolio needs the account number to create the property.

  3. Add the property to AppFolio
    Create the property record and link the bank account.

  4. Add owners, investors and loan information to AppFolio.

  5. Add tenants and leases
    Enter every tenant and upload every lease. Then backfill each tenant’s security deposit. See Backfilling Security Deposits.

  6. Legal and entity setup
    Send the EIN, Operating Agreement and LLC-5 (CA & DE) to the CPA. Add the EIN and Secretary of State info to AppFolio. Confirm ownership info and Tax ID.

  7. Confirm investor contributions
    Cross-reference with the Capital Raise Sheet. Handle the acquisition due diligence cost reimbursement.

Utilities & Transfers

Transfer all utilities and registrations to the new ownership entity.

  1. Transfer utilities
    Gas, electric, water, telephone and internet. Add the new utility accounts to AppFolio.

  2. Business tax
    Register for a Business Tax License. Attach the Temporary Business Tax Certificate in AppFolio and give a copy to the Property Supervisor to post at the property.

  3. Property tax
    Transfer property tax and enter the APN in AppFolio. Then add the property and APN to this year’s property tax board on monday. See Property Tax.

Financial & Insurance

  1. Mortgage
    Set up mortgage payments by ACH.

  2. Insurance
    Add the property to the Insurance Excel Spreadsheet. Coordinate with the agent as needed.

Leases & CAM

  1. Abstract commercial leases
    Work with the Property Supervisor to abstract them and input them in AppFolio.

  2. Create the CAM breakdown
    Coordinate with the Property Supervisor.

Vendor Setup

  1. Notify existing vendors
    Tell them about the new ownership and update the mailing address.

  2. Enter new vendors in AppFolio
    Get the W-9 and COI first. See Vendor Setup.

  3. Confirm or set up each service
    Cleaning, gardening/landscaping, fire alarm service and monitoring, elevator, pest control, security, insurance, trash, phone lines (intercom) and digital surveillance.

5. In Office

  1. AppFolio check
    Verify the lease and tenant profile pages are uploaded. Input any additional tenant contact information.

  2. Access codes
    Input the lockbox info in AppFolio: location, code and which keys are inside. Enter the gate code and garage clicker code in the AppFolio Property Info Spreadsheet.

  3. Elevator (if any)
    Verify the Elevator Permit / Certificate of Compliance. Take pictures.

  4. Service contracts
    Review every service contract. Note expiration dates and mandated non-renewal notice periods.

  5. ADA survey (if needed)

  6. Utilities
    Document each house account number, how many house meters (gas, electric, water), and where the water and gas shutoffs are.

  7. AppFolio alerts
    Set up alerts for recurring items such as fire and trespass.

6. Property Walk-Through

  1. Install the lockbox.

  2. Create a property map
    Use the ALTA survey. Mark all meters (gas, electric, water), shut-off valves, elevator/electric rooms, IT and lockbox locations, trash/recycling bins, sump pumps and roof access/ladder.

  3. Draw a parking lot map
    Note any numbering or lettering.

  4. Post required notices
    Coda Management sign. Business Tax License (post a copy, not the original). No Trespass sign, and file it with LAPD. Hazard Chemicals Posting (Prop 65).

  5. Check building systems
    Intercom and elevator, if any. Note the brand and service company for each and input them in AppFolio.

  6. Secure water access
    Lock the hose bibs. Lock the backflow if it has a cage, and note it if there is no cage. Transfer the backflow notices.

  7. Photography
    Photograph the whole property. Upload to publisher and create a property booklet.

7. Schedule Vendors

  1. Fire service
    Extinguisher expirations, fire alarm testing and standpipe testing. Provide the fire system details, including the number of extinguishers.

  2. Reprogram the intercom (if any).

  3. Schedule property/building cleanup.

  4. Schedule a low-flow fixture check (toilets).

  5. Check and schedule the backflow device.

  6. Review inspection reports
    Schedule any required maintenance, including hydrojetting.

  7. Seismic retrofit (if applicable).

  8. Address property violations (if any).

  9. Renovations / CapEx work
    Get bids from 3 general contractors.