LPC Due Diligence Insight Series | Part 2 of 3
Due diligence can produce a great deal of information. That does not necessarily mean it will produce a better property decision.
The value lies in knowing what you are trying to establish before you start investigating.
In Part 1 of our Right… Wrong… series, we looked at why due diligence should inform a property decision, rather than simply confirm one.
The next question is: what should that due diligence actually be testing?
A sound process starts well before the technical assessment.
Start with the questions, not the property.
Every business brings a different set of requirements to a property decision.
Its strategy, people, growth plans, ways of working, technology, existing workplace and future ambitions all influence what a property needs to deliver.
That makes briefing more than an exercise in establishing how much space is required.
It means identifying the right stakeholders, asking the right questions and understanding where the business is heading - not simply documenting where it is today.
Senior leadership may define the strategic direction. Business units understand operational requirements. IT can identify infrastructure and resilience needs. Property and technical consultants bring another perspective again.
Each contributes information that changes what should subsequently be investigated.
Watch: Briefing - Business Before Space»
A good brief creates the lens through which the property can be assessed.
Without it, due diligence can become comprehensive in detail but weak in relevance.
You may know a great deal about the building without knowing whether those findings matter to the business that intends to occupy it.
Then find the evidence.
Once the business requirements are understood, discovery turns those questions towards the property.
This is where assumptions need to give way to evidence.
The information available during a leasing process can range from architectural and engineering drawings to fitout guides, base building standards, fire documentation, compliance information and hazardous materials registers.
Individually, these may appear to be technical documents.
Collectively, they help establish something much more commercially important: what the property will actually allow the business to do - and what it may require the business to accommodate, change or spend.
Watch: Discovery - look beyond what you can see»
The physical inspection still matters. But what can be seen during an inspection is only part of the picture.
Documentation can reveal constraints that are not immediately visible. Equally, missing or incomplete information can itself identify areas requiring further investigation.
The purpose of discovery is not to accumulate documents.
It is to obtain the evidence needed to test the property against the brief.
Information is only useful when you know what you are looking for.
This is the relationship between the first two phases of effective due diligence:
Briefing establishes the questions.
Discovery establishes the facts.
One without the other leaves a gap.
Discovery without a strong brief risks gathering information without knowing its significance.
A brief without proper discovery risks allowing business requirements to rest on assumptions about what the property can deliver.
Neither is enough to make the decision.
That comes next: assessing what has been uncovered, understanding its implications and determining what needs to happen before a commitment is made.
Business before space. Futureproof today.
Next: Assessment + Implementation
In Part 3 of the Right… Wrong… Due Diligence Insight Series, we look at how the information gathered through briefing and discovery is assessed and translated into action.
A decision that stands the test of time.
Good due diligence gives a business the information it needs to make a considered property decision, with a clear understanding of the trade-offs involved.
The right property is not necessarily the one that satisfies the most requirements today. It is the one whose commercial terms, capabilities and limitations are understood and aligned with the business's objectives.
Business before space. Futureproof today.
