Third-party vendors

You will have to rely on a host of third-party vendors to close your transaction. Most lenders or capital providers will require an appraisal, a structural engineering report and an environmental report, at the very least.

Then there are the attorneys. The seller, buyer and lender will all have separate attorneys. If there is mezzanine debt or equity going into the deal, then that capital source will also have an attorney. Just one attorney can slow down the whole process. It is important that all parties use attorneys with experience in commercial real estate transactions instead of using residential attorneys.

The lender also should administer the third-party-report providers and do so in the agreed-upon time frame. It is common for appraisers and engineers to ask for extensions. If the appraiser asks for information, provide it. If you get a sense that an appraiser is moving slowly, report it to the lender.

In the business of commercial real estate acquisition, execution is paramount. It trumps interest rates and relationships. It does not matter if you are getting the lowest interest rate on earth if the loan does not close. You will lose the acquisition if you are not focused on execution.

Good commercial brokers will be of great value in controlling the risk. Their job is to vet the lenders and capital providers, to assist with the accumulation and dissemination of information (and with packaging the loan request) and to assist with the third-party vendors. Try to focus on these factors so that your work does not become the Achilles' heel of the transaction.

David Ross is senior director of Tremont Realty Capital LLC, a national direct lender and real estate investment-banking firm headquartered in the Prudential Tower in Boston, with other U.S. offices. Through its principal and advisory operations, the firm engages in debt and equity placement, direct investment and institutional advisory services. Tremont Realty Capital's Web site is www.tremontcapital.com. Reach Ross at (617) 867-0700, ext. 773, or at dross@tremontcapital.com .

Page: 1 2 3 Previous