Due Diligence

Due Diligence

Due Diligence is an essential part of any purchase, especially a hotel. Due Diligence on a hotel purchase is unique, as a hotel sale and purchase involves additional complexities given the intricate nature of the interrelated business and real estate components of a hotel.

In the context of a hotel acquisition, due diligence refers to the investigation conducted by a potential buyer of the hotel that is the target of the acquisition. The investigation covers both the physical asset (i.e. the hotel structures, parking, systems, equipment, and inventories), as well as the operating business conducted at the hotel facility, and the relevant markets and environment.

Our Hotel Due Diligence Services Include:

  • Asset and Physical Plan Review

  • PIP Review

  • Inspections and Consultant Coordination

  • Brand Recommendations

  • Pre-Construction Planning

  • Preliminary Project Budgeting

  • Coordination with Hotel Management

  • Quality Control Review

  • Conflict Recommendations and Resolution

  • ADA Compliance Review with Designers

Due Diligence - CVGCY Queen

The purpose of the investor’s due diligence is to understand and evaluate the potential investment in the hotel. It is the analytic review of the real and personal property, the business operations and potential of the specific hotel. This effort all seeks to validate the investor’s reasons for buying the hotel and to avoid surprises after the purchase has closed.

Because of these surprises, the buyer’s first line of defense from unexpected loss is solid due diligence. By performing due diligence in the early stages of a contract negotiation, the buyer will have more alternatives, less costs and more negotiating power to deal with the issues.