In the new normal of “time compression” that affects all aspects of a real estate transaction – early negotiations, legal documentation, due diligence and closing – the successful entrepreneurial company must have an experienced “deal team” with logistical skill to successfully close deals. Busted deals waste precious time and resources. In order to maintain success, your company must be successful in closing the deals on time and within budget.
Everyone is experiencing “time compression” – whether it is imposed by financing sources, sellers, buyers or uncontrollable outside factors. At the same time, the business, tax, regulatory and legal issues raised in a transaction continue to be and are becoming more complex. For example, if the transaction involves real estate acquired prior to the recent downturn in the real estate market, current due diligence may disclose issues which were not previously discovered during the prior market boom or, although discovered, were not considered material. In many instances, these issues are not new, but what is new is the availability of more granular information about almost everything. This increased level of information provides more opportunities for issues to arise which slow down or which could even kill a deal. Companies and investors must be proactive in this process of obtaining information with compressed time in order to drive to a successful outcome. To do that requires skill in managing the flow of information about a deal in an efficient and timely manner so that all parties involved in a deal reach a level of comfort and satisfaction necessary to successfully close the transaction.
Not everyone can be the visionary entrepreneur. Someone involved in the transaction must either know where the information is located or have the necessary skills, knowledge and experience to get the information quickly which is often from an overworked, underappreciated governmental official answering a phone. The logistics person or team must be detailed oriented, organized (i.e. read – checklists!), have the ability to prioritize, have great people skills (i.e. phone courtesy skill is a must), and have a sense of urgency to handle the information requests, keep track of the requests in an organized format, and move the flow of that information as quickly as possible to the right people.
Many times the requested information has critical legal and accounting sensitivities that need to be reviewed and addressed by an attorney or accountant before it is delivered to others. Florida real property is affected by state, county and city laws and ordinances in addition to federal laws and regulations. Understanding what must be satisfied at each governmental level can be critical to meet transaction deadlines. Deal teams need to be alert to spot potential “hot issues” so that legal, accounting or other assistance can be obtained quickly and efficiently.
As deal teams are evaluated for this new year’s activities, “deal logistics” must get the attention that it deserves.