Sales process
Which documents does an institutional real estate investor need?
From the first approach through the information memorandum to the data room: a checklist of the documents institutional buyers expect at each stage.
Documents determine pace and price discussion. Not because buyers are formalists, but because every gap in the documentation is modelled as risk – and risk is priced.
The overview below sorts documents by process stage. It does not replace asset-specific coordination with the advisers involved.
Note: the following provides a general overview of possible transaction structures and related questions. It does not constitute legal or tax advice. The specific legal and tax consequences should be reviewed for each transaction by the relevant professional advisers.
Which documents are needed for the first approach?
An anonymised short profile is enough for the first approach. It should allow an investor to decide within a few minutes whether the asset fits its screen.
More is not useful at this point: the data room is neither ready to be sent nor unproblematic in confidentiality terms.
- Location quality and asset class, without identifying detail
- Order of magnitude: area, units or rooms, volume
- Cash flow headlines: in-place rent, occupancy, key lease terms
- Key investment characteristics and known particularities
- Intended transaction structure and price indication where appropriate
What belongs in the information memorandum?
The information memorandum translates the asset into an investment case. It contains the reviewed core data, the derivation of the cash flow, the maintenance and investment position, the local market situation and the assumptions underlying the presentation.
Consistency matters more than length. Every figure in the memorandum must be traceable in the data room; deviations cost credibility for all other figures too.
Data room checklist: commercial
The commercial section is reviewed most frequently. It drives the income assumption and therefore the price.
- Rent roll with unit, area, rent, term, options and indexation
- Leases including all amendments and side agreements
- Area schedule reconciled with the rent roll
- Vacancy overview with cause and letting status
- Service charge statements for several years and recoverability
- For operational assets: revenue and operating data per period
Data room checklist: technical, property and financial
Technical and property documents drive the risk assessment, the financial data the modelling. Legal documents belong in the data room as transaction documents; which legal documents are required, and how they should be assessed, should be agreed with the respective legal advisers.
| Area | Documents |
|---|---|
| Technical | Building documentation, technical reports, CapEx history and plan, energy certificates, building services documentation, maintenance contracts |
| Property | Land register extract, site plan, area calculation, permits, public-law encumbrances where available, insurance documents |
| Financial | Rental cash flow, operating costs, historical figures, current budget, existing financing where relevant |
| ESG | Consumption data, energy performance, existing certificates, planned measures |
What does due diligence review in addition?
Due diligence verifies and deepens the documents provided. A commercial, technical, legal, tax and increasingly an ESG review is customary, often carried out by the buyer's external advisers.
Typical queries concern deviations between areas, rent roll and leases, undocumented amendments, unclear recovery practice and missing evidence of completed works. The legal and tax assessment of findings rests with the respective professional advisers.
In short
Documents are released by process stage, not all at once. What counts is that teaser, memorandum and data room tell the same story – with the same figures.
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Half an hour on the phone usually beats ten pages of paper.
Legal and tax notice
The information on this website is provided for general information on real estate, financing and corporate transactions only. It does not constitute legal, tax or other individual professional advice and cannot replace case-specific advice from suitably qualified lawyers, tax advisers or other professionals.
The legal and tax consequences of a transaction depend in particular on its specific structure, the parties involved, existing contracts and the applicable legal and tax framework. Such questions should therefore be reviewed individually by the relevant professional advisers before any decision is taken.
Within the content presented on this website, Fox Capital does not provide legal or tax advice.