The time it takes to conduct due diligence for commercial real estate transactions is getting increasingly shorter as buyers and real estate money managers afloat in capital push to close deals, speakers on a panel on property acquisitions at The Real Estate & Bank General Counsel Forum said Thursday.
Due diligence timelines are speeding up, said Neil Klein, managing counsel at IndCor Properties, an industrial real estate company that was until December owned by The Blackstone Group. Singapore’s sovereign wealth fund GIC bought IndCor Properties and its portfolio of 117 million square feet of U.S. warehouses in December.
Blackstone was ahead of the curve in deploying capital after the recession, but in 2012 and 2013 the number of buyers increased, Mr. Klein said.
That’s when due diligence periods were accelerated to what “lawyers and due diligence people would think were borderline crazy,” Mr. Klein said.
Shortening the time allowed for the due diligence period is viewed by many “as a self-inflicted risk,” Mr. Klein said.