Retrade Package — Project Helios
Buyer-side action package. Internal strategy is isolated from seller-facing language. Approvals route through partner review before any external send.
A structured retrade anchored to the HVAC reserve gap, paired with seller-funded recommissioning and specific representations.
CoreNav-adjusted value range is $76.2M–$79.1M versus the seller’s $82.5M. The deal is viable. Recommended ask is a $2.7M price reduction or equivalent $1.8M seller-funded HVAC reserve, with closing conditions, a specific R&W, and a small seller credit. See §2 for basis and §4 for impact bridge.
J. —
Thank you for the updated engineering report, the revised rent roll, and the seller Q&A Round 2. Our team has completed a thorough review of the diligence materials. We remain committed to the transaction, but our review has identified several material items that we need to address before we can finalize our investment committee approval.
The engineering report flags three rooftop units (RTU-3, RTU-5, and RTU-7) as end-of-life, with a combined replacement cost band of $2.6M to $3.8M excluding installation. This is materially above the capital plan provided, which budgets only $450K over 24 months for HVAC. We are requesting a third-party replacement bid or, in lieu of one, a seller-funded HVAC reserve of $1.8M at close, released against qualified invoices.
Separately, the utility savings projection in your pro forma is supported by only three months of post-upgrade bills. We need 24 months of utility bills and the BAS schedule change logs to validate the $95K annual savings before they can be carried into our model.
To reflect the items above, we are proposing a purchase price adjustment of $2.7M, or equivalent seller-funded reserve, plus closing conditions including a tenant estoppel from the anchor tenant currently on a month-to-month holdover and a specific representation and warranty regarding the completeness of the disclosed insurance loss runs.
A more detailed concession summary, including the supporting evidence, is attached. We are available to discuss at your convenience. Outstanding data requests are listed in the appendix and we would appreciate response by end of week.
Best,
A.