Investors
What investment committees examine
Ten questions that can regularly play a role in investment committees. Anticipating them in the memorandum often saves a round.
An investment committee often decides less on the property than on the quality of the paper. If a central question stays open, matters are frequently deferred — and the next meeting may fall outside the transaction timetable. Committee practice and decision paths do, however, differ from house to house.
Questions that regularly play a role
The following points come up frequently in processes we accompany. They are not universal committee practice, but a workable self-check for any paper.
- Why is the owner selling — and why now?
- Who were the other bidders and where did they land?
- What happens if the largest tenant does not renew?
- What does the exit look like and who are the likely buyers?
- What capex is foreseeable in the first years?
- How does the asset perform energetically and what would an upgrade cost?
- Which assumptions in the business plan are the most sensitive?
- What does the downside case look like — and does it cover debt service?
- What covenants does the financing carry and how much headroom remains?
- What happens if letting takes longer than planned?
The difference between an answer and evidence
Committees accept assessments, but with derivation. "The rent is in line with the market" rarely carries; comparable transactions with source and period usually do. That research is legwork and often decides the meeting.
Timing
Ask early about the meeting calendar. Processes fail less often on approval than on the next meeting falling after exclusivity expires. We deliberately align sale process deadlines with this.
In short
The committee reviews the paper, not only the asset. Anticipated questions with evidence can save an entire meeting cycle.
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