TDD inspections of a real estate portfolio of more than 2,000 apartments purchased by Orange Capital Partners

Raksystems performed Technical Due Diligence inspections of a real estate complex of more than 2,000 apartments for the buyer in the summer of 2022. The inspections were performed in connection with a real estate transaction, when Starwood Capital and Avara sold the properties to Orange Capital Partners.

Technical Due Diligence inspections ensure the condition of the apartments before purchase

The portfolio of approximately 2,200 apartments was sold by the American investment company Starwood Capital Group together with Avara Oy. The buyer was a Dutch real estate investment company Orange Capital Partners, which wanted Raksystems’ Technical Due Diligence inspections of the properties.

The purpose of Technical Due Diligence (TDD) inspections is to ensure the condition of the properties during transaction and it serves as a cornerstone of many real estate investment companies. Inspections provide valuable and objective information about the condition of the property and its surroundings in real estate transaction situations.

With the help of TDDs, a smooth real estate transaction is ensured, when potential risks and future repair costs are made known to the property buyer. The current condition of the building is carefully examined by the structural, HVAC and electrical engineering experts.

A large real estate complex with a tight schedule

The investment complex is spread over 16 different locations, while more than 50 percent of the value of the complex is located in the Helsinki region. The properties were mainly older residential apartment buildings that had been extensively renovated by Starwood Capital before the sale.

Almost the entire Condition evaluation and TDD department was involved in the challenging project, for example with reporting and site visits. The project had a very tight schedule, as there was only two weeks to visit all the sites.

The project was completed well and smoothly, and the help of the whole team was needed. This was by far our biggest TDD project to date,” says Department Manager Serge Skorin.

Environmental Due Diligence inspections as additional work afterwards

After the TDD inspections, the EDD inspections were carried out. The purpose of Environmental Due Diligence inspections is to ensure the property’s healthy living environment, and the report examines possible risks related to harmful substances in the property. The inspection includes both the building itself and possible harmful substances related to the soil. The department’s work included commenting already existing EDD inspections, in addition to which updated EDD inspections were carried out as needed to compliment the overall situation.

Orange Capital Partners has already invested in Finland before, when the company bought a complex of 1,900 apartments located in 17 different locations from Morgan Stanley and Premico. We also performed the TDD inspections of this previous property complex.

“The cooperation has gone well, and we have good relations with the customer. We look forward to similar projects in the future as well, which seem to be in store for us in the future”, concludes Skorin, satisfied and happy about the smooth partnership.

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