Pre-Acquisition Due Diligence

An increasingly important area in purchase and acquisition planning is state and local taxes.  In recent years states have more aggressive in pursued corporate taxpayers.  Certain jurisdictions now consider a change in control of the stock of a parent corporation to result in the sale of the underlying real estate, which in many instances will lead to an increase in the tax liability for years following such a transaction.  

Due diligence services for an acquisition typically involves evaluating the operating performance of the acquired asset and any implied future valuation of that property.  It is most frequently employed by the purchaser with the goal of uncovering any potential tax exposure.  This evaluation may include a review of operating methods and expenses, marketing strategies, facility renovation requirements, and competitive market conditions.

At Regency Advisory Group our pre-acquisition due diligence services include:

• Providing a 3-5 year estimate of taxes and assessed values
• Verifying all parcels that are part of a given transaction
• Identifying any special taxing districts in which the property is located
• Obtaining verification of the correct millage rate for each parcel
• Confirming the deferral or reduction of real property taxes or other impositions, or payments in lieu of taxes
• Forecasting future valuations based upon local jurisdiction assessment methodology
• Accounting for any reassessment event that may be triggered by the proposed acquisition