The Syndication Process
AGM’s Syndication Process is ongoing, as we are constantly looking for both on- and off-market opportunities.
It typically takes between 60 and 90 days to acquire a new property, with many activities overlapping – more so the shorter the closing timeframe.
Identify the Opportunity
After AGM’s unique sourcing process enables us to identify an interesting property with long-term investment potential, the process quickly unfolds. Oftentimes, the properties sourced are off-market – a bit under-the-radar – providing some insulation from competition.
Secure the Asset
If we aren’t already under contract, we finalize the details of the Purchase and Sale Agreement, open title and escrow, and request due diligence files from the Seller. This generates a flurry of activity for the investment team.
The Feasibility Stage
The Feasibility period (sometimes called the due diligence period) is usually 30 – 45 days. At this stage, we:
- Carefully review each lease and create lease abstracts, capturing the lease expiry, rental rates, security deposits, options, and other notable details.
- Review property financials, confirming that the property income and expenses are in line with the proforma we generated to calculate the investment opportunity
- Review all service contracts (HVAC, landscaping, elevator maintenance, etc.)
- Review available third-party surveys and inspections provided by the Seller (Phase I, ALTA, HVAC maintenance reports, etc.)
- Order title / review title
- Open escrow
- Order additional surveys and inspections, if necessary
Raise the Equity
After we place the latest opportunity under contract and commence the feasibility stage, we raise the equity for the acquisition.
Concurrent with the equity raise and due diligence periods, our investment team is busy speaking with a variety of both traditional banks and life insurance companies to secure the best funding possible.
After initial discussions, we narrow the possible lenders to three or four institutions who are likely to be the best fit. We have experience securing traditional institutional loans with reserve requirements all the way to one-to-one debt service ratio loans. We then provide the lender with access to the due diligence files, and they begin their own review process.
Once we have received a Commitment Letter from our lender, we finalize the LLC/Operating Agreement, obtain an EIN from the IRS, and register with the State of Washington so that all paperwork is in order at the time of closing. Any documents you are required to sign will be sent to you for electronic signature.
After the lender has confirmed that they have everything they need to fund the loan and the title/escrow company has everything they need for closing, we re-confirm the closing date and time and arrange to wire the down payment. On the day of closing, the required signatories meet with the escrow agent to sign all documents required to fund and record the transaction.
Once we have closed on the building, our property management team begins onboarding the property. They:
- Open a trust bank account for the property to receive rent payments and process expenses
- Setup the property within the accounting software
- Enter all the leases into the accounting system
- Create and deliver tenant welcome packages
- Setup and give tenants access to the online work order page and online payment portal
- Coordinate with vendors to update contacts, billing information, service schedules, etc.
- Begin coordinating any capital improvements that were identified during the feasibility period
- Collect and process monthly rents and operating costs
- Conduct routine property inspections
- Perform facility maintenance / respond to tenant maintenance requests
If there are any vacancies at the time the property is onboarded, the brokerage team:
- Prepares marketing materials
- Installs leasing signage on the property
- Lists the vacancies on the AGM website
- Posts the vacancies to all the relevant commercial MLS sites and portals
- Sends email campaigns
- Calls prospective businesses
- Conducts property tours with prospective tenants
These tasks remain ongoing throughout the property “hold” period, usually for a period of five to ten years.