Acquiring an industrial building in a state where you do not regularly do business requires careful coordination between the buyer’s counsel and local counsel familiar with the laws of the state where the property is located. A 90,000 square foot industrial building is a significant acquisition by any measure, and the due diligence required — title, environmental, survey, physical condition, and any existing lease review — must be completed thoroughly regardless of the buyer’s geographic familiarity with the market. Layering a financing component on top of the acquisition adds another dimension of complexity, as the lender will have its own due diligence and documentation requirements that must be satisfied simultaneously with the purchase closing.
Mandelbaum Barrett PC attorney Joshua Gorsky, Esq. represented a buyer in the purchase and subsequent financing of a 90,000 square foot industrial building in Illinois. Gorsky practices in the firm’s corporate law and real estate practices, advising clients on commercial real estate acquisitions, financing, leasing, and related transactional matters. This representation reflects the firm’s ability to handle large-scale commercial real estate acquisitions in out-of-state markets on behalf of buyer clients.
Buying and Financing a Large Industrial Building Out of State
Representing a buyer in a simultaneous purchase and financing of a 90,000 square foot industrial building involves managing two parallel tracks of due diligence and documentation. On the purchase side, counsel must review the purchase agreement, confirm clear title, review and negotiate any existing leases or operating agreements, obtain environmental assessments, and confirm that the property’s physical condition matches the buyer’s expectations and the purchase price. On the financing side, the lender’s due diligence requirements overlap significantly with the buyer’s, but the lender will also require its own title insurance policy, appraisal review, environmental reliance, and a suite of loan documents designed to protect its security interest.
For an out-of-state acquisition in Illinois, coordination with local Illinois counsel is typically required to ensure that title and recording requirements comply with applicable state law. Industrial properties of this scale may also involve considerations unique to the specific market, including zoning compliance, access rights, utility infrastructure, and loading dock and truck court configurations that affect the property’s utility for the buyer’s intended use.
According to the U.S. Environmental Protection Agency, industrial property acquisitions require attention to environmental conditions given the potential for prior industrial use to have affected soil and groundwater. Phase I environmental site assessments are a standard component of industrial property due diligence and protect buyers and their lenders from acquiring contaminated property without adequate disclosure.
Contact Mandelbaum Barrett PC for Commercial Real Estate Guidance
If you have questions about commercial real estate acquisitions, industrial property transactions, or out-of-state purchase and financing matters, the corporate law and real estate team at Mandelbaum Barrett PC can help.
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These stories are successful case results from our attorneys. Please note that results may vary depending on your particular facts and legal circumstances.