TDD Assessments for a 2,000+ Apartment Real Estate Portfolio Acquired by Orange Capital Partners
In the summer of 2022, Sustera conducted Technical Due Diligence (TDD) assessments for the buyer of a real estate portfolio comprising over 2,000 apartments. The inspections were carried out as part of a transaction in which Starwood Capital and Avara sold the properties to Orange Capital Partners.
Technical Due Diligence Confirmed Property Condition Before Purchase
The real estate portfolio, consisting of approximately 2,200 apartments, was sold by the U.S.-based investment firm Starwood Capital Group in partnership with Avara Oy. The buyer, Dutch real estate investment company Orange Capital Partners, commissioned Sustera (formerly Raksystems) to perform Technical Due Diligence (TDD) assessments on the properties.
The purpose of Technical Due Diligence (TDD) inspections is to verify the condition of a property during a transaction, forming a crucial part of many real estate investment companies’ operations. These assessments provide valuable and objective insights into the condition of the property and its surroundings during real estate transactions.
TDD helps ensure a smooth transaction by identifying potential risks and future repair costs before purchasing a property. The inspections evaluate the building’s current condition through structural, HVAC, and electrical engineering experts to provide a comprehensive overview of the property’s state.
Large-Scale Real Estate Portfolio on a Tight Schedule
The portfolio of approximately 2,200 apartments was spread across 16 different locations, with over 50% of its total value concentrated in the Helsinki metropolitan area. The properties mainly consisted of older residential buildings that had been extensively renovated by Starwood Capital before the sale.
This intensive and challenging project engaged nearly the entire Sustera’s Condition Surveys and TDD department, including reporting and on-site inspections. The project had a particularly tight schedule, requiring inspections at all sites within just two weeks.
“The project was completed successfully and efficiently. This was by far our largest TDD project to date,” says Serge Skorin, Head of Department at Sustera.
Part of the project was carried out in collaboration with TA Europe.
Environmental Due Diligence Conducted as an Additional Assessment
Following the TDD inspections, Environmental Due Diligence (EDD) assessments were also carried out. The purpose of EDD assessments is to ensure a healthy living environment by evaluating potential risks related to hazardous materials. The inspection covered both building-related and soil-related contaminants. The team reviewed existing EDD reports and supplemented them with updated inspections as needed to provide a complete overview.
Continued Collaboration with Orange Capital Partners
Orange Capital Partners had previously invested in Finland when it acquired a 1,900-apartment portfolio from Morgan Stanley and Premico across 17 locations. Sustera also conducted the TDD inspections for that transaction.
“The collaboration went smoothly, and we have a strong relationship with the client. We look forward to similar projects in the future, as more opportunities seem to be on the horizon,” Skorin concludes, pleased with the successful partnership.