RIGHT… WRONG… | LPC Due Diligence Insight Series | Part 3 of 3
Once due diligence investigations are complete, a business may have a comprehensive understanding of a property's condition, capabilities and constraints, yet still lack clarity about what those findings mean for its workplace decisions.
The value of due diligence lies not simply in identifying risks, but in understanding their implications and ensuring they influence the terms of the commitment.
In Part 2 of our Right… Wrong… series, we explored the importance of Briefing and Discovery: establishing the right questions and gathering the evidence needed to answer them.
The final two phases, Assessment and Implementation, turn that evidence into informed commercial decisions.
Right… Assess the implications, not just the findings.
A property may appear suitable on paper, but its technical capabilities and compliance requirements can materially affect how the business can occupy and operate within it.
Assessment involves testing the information gathered during discovery against the business brief, relevant building requirements and intended use of the premises.
This includes examining building services, infrastructure, fire safety, accessibility and other technical considerations that may affect operational suitability.
For example, a floorplate may provide sufficient space for the proposed workforce, but fire safety requirements, including exit travel distances, may constrain how that space can be configured or occupied.
Similarly, a building services limitation may be technically manageable through an upgrade, but the associated costs, timing and responsibilities could materially change the commercial proposition.
The question is not simply what has been identified, but what does it mean for the business?
Watch: Assessment - understanding the implications
Effective assessment distinguishes between issues that can be addressed, risks that can be managed and constraints that may fundamentally affect the property's suitability.
It also establishes which matters require further investigation, clarification or resolution before a commitment is made.
Wrong… Identify the risks, but fail to act on them.
A due diligence findings will influence the terms on which a business commits to a property.
This is where Implementation becomes critical.
Identified shortcomings, compliance issues and building limitations should inform lease negotiations, including the allocation of responsibilities, costs and liabilities.
Where a property requires modifications or remedial works, the business needs clarity about what will be delivered, by whom, at whose cost and within what timeframe.
These matters may need to be reflected in the lease documentation, agreed landlord works, financial allowances or other contractual protections.
Watch: Implementation - turning findings into action
The objective is not to eliminate every risk. Commercial property decisions inevitably involve trade-offs.
It is to understand which risks the business is accepting, whether they are commercially justified and what protections or obligations should be agreed before proceeding.
Without this final step, a business may identify significant risks through due diligence yet still assume responsibility for matters that could have been addressed during negotiations.
A complete picture. A considered decision.
The four phases of due diligence serve distinct but connected purposes:
Briefing establishes what the business needs to know.
Discovery gathers the evidence.
Assessment determines what the findings mean.
Implementation translates those findings into action.
Each phase strengthens the next.
Without a clear brief, investigations can lack direction. Without adequate discovery, assessment rests on assumptions. Without considered assessment, findings may be misunderstood. And without implementation, identified risks may remain unresolved.
Good due diligence does more than establish whether a property is suitable.
It helps ensure that the business understands the commercial implications of its decision and that those findings are reflected in the commitments it ultimately makes.
Business Before Space. Futureproof Today.
This concludes LPC's three-part Right… Wrong… Due Diligence Insight Series, examining how businesses can make more informed commercial property decisions through a structured approach to due diligence.
