Review

Virtual data room Software: Verity of solutions for real estate business

At the moment, commercial real estate is still recovering from the dramatic changes related to the global pandemic, so the issue of digitalization is more relevant than ever. Companies are now looking to streamline transaction processes between parties and make it easier, faster, and safer. In this case, virtual data rooms are more suitable than anything else, the software is great for conducting due diligence on commercial properties. In this article, we’ll cover the main features of VDRs for real estate businesses. 

What is commercial real estate due diligence? 

Due diligence is needed to analyze and verify a potential acquisition in detail on the part of the buyer, which ensures his or her safety. Proper due diligence should help avoid any unpleasant events that may already occur after the purchase. Commercial property buyers have little legal protection compared to residential property buyers, so they need to be doubly serious about all the details of the transaction. 

To find the right VDR for this type of transaction, you need to decide on the final investment objective. In commercial real estate, there are three main profit options: 

  • Investment is when a buyer buys a property intending to later resell it at a higher price
  • Development of RE is when a purchase is made for a small price and then it is restored and improved to sell at a higher price in the future
  • Business transactions – is when a buyer buys a property to have a steady income from it, for example buying a restaurant, hotel, etc. 

When you decide on the purpose it will be easier to optimize the process and contribute to the effectiveness of due diligence. 

The Advantages of VDRs for Commercial Real Estate Due Diligence 

VDR has some distinctive features that make it an ideal option for carrying out transactions involving real estate, namely, its complexity, duration, ability to contain a large number of users at the same time, and the excellent security that is so necessary in today’s digital world. 

Typically, the due diligence process takes 1-3 months, and during this time, all parties to the transaction should thoroughly check a large volume of documentation and make sure the transaction scheme is transparent. Here’s how a virtual data room can help you do it: 

  • Great document management features and automation of some processes, such as file indexing
  • Role-based access control of documents, as well as time and location restrictions
  • Advanced document security in the form of customizable watermarks, as well as fence view, screen capture prohibition, and download restriction
  • Flexible rights management settings
  • Platform flexibility to access information – VDRs typically support all operating systems and devices, so you can access the right documents anytime, anywhere
  • Customizable storage solutions and tools
  • Secure and convenient collaboration and communication features. Discuss important issues in a fully secure space for more informed decisions
  • Automatic reporting of user activity and tracking of any processes in the space
  • Simplified document organization with bulk upload and download functionality for large documents 

Virtual Data Rooms is an extremely convenient tool that also offers out-of-the-box templates, excellent support services, and time and cost savings. You can also use it after due diligence during property management. With VDR you will be able to control the real estate, plan its upcoming development and carry out mergers and acquisitions.