confidential offering memorandum - loopnet...this memorandum contains summaries of certain documents...

Confidential Offering MemorandumHigh End Assisted Living Residency In Durham, NCPurchase and NN Leaseback Opportunity

Colliers International

Table of Contents

2

Introduction 3

Executive Summary 4

Lease Agreement Summary 5

Recommended Property Purchase Offer Summary 7

Property Sheet, Photos and Financial Proforma 8

Locations 11

Assisted Living - Memory Care Market 12

Assisted Living - Memory Care Regulations 13

About the Tenant 14

Tenant SWOT analysis 15

LiveWell Business model 17

LiveWell property criteria 20

LiveWell Competition 21

Triangle residential market stats 24

Risk Factors 27

Terms and Conditions 28

Additional Investor services 31

FAQs 32

Deal brought to you 33

Disclaimer 34

Working with Real Estate Agents 35

About Colliers International 37

Colliers InternationalColliers International

Introduction

This Confidential Offering Memorandum (“Memorandum”) has been prepared by Colliers International RDU (“Colliers International RDU ”

or the “Company”).

This Memorandum is being furnished to prospective investors on a confidential basis to be used so that prospective investors may

consider an investment on a first come first serve basis and may not be used for any other purpose.

Any financial forecasts contained in this Memorandum are based on a Colliers International RDU estimate of the results of operations for

the forecast period. Any forecasts or representations, written or oral, which do not conform to those contained in this Memorandum,

shall not be permitted. The actual results achieved during the forecast period may vary from the financial forecasts and the variations

may be material.

This Memorandum contains summaries of certain documents believed to be accurate, but reference is hereby made to the actual

documents, copies of which will be provided with the final offering materials or are available at the offices of Colliers International RDU.

All such summaries are qualified in their entirety by this reference. Certain information contained herein has been obtained from sources

deemed reliable, but no representation or warranty is made as to the accuracy of such information. Any representations other than those

set forth in this Memorandum and any information other than that contained in documents furnished by Colliers International RDU, upon

request must not be relied upon in connection with this offering.

Prospective investors are not to construe the contents of this Memorandum or any prior or subsequent communication from Colliers

International RDU or any professional associated with this offering as legal or tax advice.

Each investor should consult his own counsel, accountant and other advisors as to legal, tax, economic and related matters concerning

the investment described herein and its suitability for that investor.

Prospective investors are urged to request any additional information they may consider necessary or desirable in making an informed

investment decision. Each prospective investor is invited, prior to the consummation of a purchase of any property, to ask questions of

and receive answers from Milos Radojkovic of Colliers International RDU. Milos Radojkovic may be contacted at:

Milos Radojkovic Broker

Colliers International RDU | 702 Oberlin Rd. Suite 400 | Raleigh, NC 27605

Phone (919) 282 4000 | Fax (919) 834.4488 | [email protected]

3


Executive Summary

The Concept• Sale leaseback - Purchase of the subject property from LiveWell North Carolina

Income Fund, LLC (LiveWell is currently the tenant with an assignable option to

purchase) that will be simultaneously leased back to LiveWell North Carolina

Income Fund, LLC (LiveWell or the “Tenant”), an operator of high end, private

pay, dementia focused adult care homes.

The Opportunity• NN commercial style lease with an experienced and proven tenant

• High yield investment: cash flows

• Superior liquidity of underlying asset: single family residential market

• Hedge against inflation

The Potential• Exposure to ever growing assisted living – memory care sector

• Extremely competitive CAP rate

4


Lease agreement summary

5

Lease Rate 8.5%

Year 1 Lease (based on $710,000 sales price) 60,350.00$

Initial Lease Term in years 5

Yearly rent bumps for Initial Term 3%

Number of Lease renewal options 2

Each Lease renewal options length 5

Notice period to exercise renewal option min. 180 days prior to expiration of term

Yearly rent bumps for Extension Terms 3% annually

Initial Security deposit 1 month rent

Operating Expenses (see below for listed items) as

per proposed lease art. 2.4, paid by:

Sewer/Septic Tenant

Water Tenant

Electric Tenant

Gas (if available) Tenant

Telephone Tenant

HVAC (maintenance/service contract), repairs up to

$1000 per incidentTenant

Security System (if available) Tenant


Lease agreement summary (continued)

6

Fiber Optic (if available) Tenant

Janitor/Cleaning Tenant

Trash/Dumpster Tenant

Landscaping maintenance Tenant

Sprinkler System (if available) Tenant

Termite and Pest Control Tenant

Snow and Ice removal Tenant

Maintenance Interior and Exterior of the buildings Tenant

HOA Dues Tenant

HOA special assessments Tenant

Roof, foundation and HVAC replacement Landlord

Landlord Real Estate Property Insurance premiums Tenant (not included in base rent)

Increase in Landlord Insurance premiums Tenant

Real Property Taxes Tenant (not included in base rent)

Increase in Real Property Taxes Tenant

Right Of First Offer for Lease extension Tenant has 10 business days to respond

Right Of First Offer for Lease extension (renewal) If property goes back on the market to be leased out

Purchase option

During initial term; sales price: appraised value +10%, subject

to a floor value equal to original cost of acquisition cost +10%


Recommended Property Purchase Offer Summary

7

Property Asking Price 710,000.00$

Due Diligence Fee (non-refundable) 3,000.00$

Initial Earnest Money Deposit (refundable during DD period) 50,000.00$

Due diligence number of days from fully executed contract 15

Closing in number of days from fully executed contract 21

Seller paying buyer's expenses -$

Other terms

NOTES: It is further understood that until an offer has been accepted,

the seller is free to consider and may accept any other offers to

purchase presented that contain terms and conditions satisfactory to

him/her in his/her sole discretion.


LiveWell SW Durham, NC 27707

Property Sheet (address to be released after CA execution)

8

Property info:

House SF finished 4166

House SF unfinished+other 608

Note: square footage not professionally measured Please measure if important

Acres 1.326

Year Built 1971

Features Pool, decks, circular driveway

Recent Updates

Sprinkler System - to be installed

Renovations - to be finalized



Financial Proforma

9

Weighed Purchase Price 710,000.00$

CAP (lease factor) 8.50%

Lease Year 1 60,350.00$

Lease Year 2 62,160.50$

Lease Year 3 64,025.32$

Lease Year 4 65,946.07$

Lease Year 5 67,924.46$



Photos (prior to LiveWell occupancy)

10


Location

11

• Subject property is

located in proximity to

Duke University, UNC

Chapel Hill, Duke and

UNC hospital centers,

with convenient access

to major thoroughfares

such as I40, I85, 15-501

creating a major

resident attraction and

retention pool.


Assisted Living - Memory Care Market

12

• North Carolina Projections

• By year 2025 there will be 210,000 people aged 65 and older affected by Alzheimer’s• https://www.alz.org/documents_custom/facts_2016/statesheet_north_carolina.pdf

• http://alz.org/facts/

• By 2025 that will represent a 31.3% increase since 2016

• LiveWell projects that 5% (approx. 10,500 people) will be able to afford high end

personalized and low staff to resident ratio memory care in SFR (single family

residence)

• With maximum 6 residents per SFR, this segment of the market will be in need of

approx. 1,750 SFR in North Carolina alone.

• More on Alzheimer’s disease: http://alz.org/documents_custom/2017-facts-and-

figures.pdf

https://www.alz.org/documents_custom/facts_2016/statesheet_north_carolina.pdf

http://alz.org/facts/

http://alz.org/documents_custom/2017-facts-and-figures.pdf


Assisted Living - Memory Care Regulations

• Official classification for this type of group homes:• Assisted Living Property (designation endorsed by the following organizations:

American Association of Homes & Services for the Aging (AAHSA); American

Health Care Association (AHCA); American Seniors Housing Association

(ASHA); Assisted Living Federation of America (ALFA); National Center for

Assisted Living (NCAL); and the National Investment Center for the Seniors

Housing & Care Industry, Inc. (NIC).)

• Zoning permitted for this type of group home:• Residential

• Federal:• HOPA 1995 Act. https://www.hud.gov/offices/fheo/library/hopa95.pdf

• https://www.gpo.gov/fdsys/pkg/PLAW-104publ76/html/PLAW-104publ76.htm

• State:• http://reports.oah.state.nc.us/searchRules.asp?title=%2Fncac%2Ftitle+10a+-

+health+and+human+services&chapter=%2Fncac%2Ftitle+10a+-

+health+and+human+services%2Fchapter+13+-

+nc+medical+care+commission&searchCriteria=13g&returnType=Rule• See due diligence vault for more info

13

https://www.hud.gov/offices/fheo/library/hopa95.pdf

https://www.gpo.gov/fdsys/pkg/PLAW-104publ76/html/PLAW-104publ76.htm

http://reports.oah.state.nc.us/searchRules.asp?title=/ncac/title+10a+-+health+and+human+services&chapter=/ncac/title+10a+-+health+and+human+services/chapter+13+-+nc+medical+care+commission&searchCriteria=13g&returnType=Rule


About The Tenant

• LiveWell North Carolina Income Fund, LLC Inc. is a developer and operator of high end, private

pay adult care home specializing in the care of individuals with dementia and other memory

care challenges. The fund is based in Chapel Hill, North Carolina and was created to expand on

the success achieved by the first LiveWell care home launched in 2011.

• With over 100 years of combined management expertise, LiveWell's senior management team

is dedicated to serving the underserved population of aging baby boomers in North Carolina

seeking an alternative to antiquated senior care models.

• LiveWell’s unique care model embraces aging as a unique and precious opportunity in one’s

life for discovery, growth and restorative activities, not a time for idleness, decline and despair.

• LiveWell’s custom designed care programs build on the unique moments of each individual’s

daily life from which they foster an environment where each day is filled with encouragement,

achievement and well-being.

• For more information on LiveWell:

• http://www.lwcares.com/

14

http://www.lwcares.com/


LiveWell SWOT analysis

• Strengths:• Resident’s quality of life and independence

• Established and smoothly functioning operations

• Everyone wants to stay at home (this is especially what children want for their

parents)

• LiveWell does not force a move towards diaper use for their residents and tries to

preserve their independence as much as possible

• Spouses, siblings and cousins are welcomed to become residents (usually

occupying master bedrooms, two bed rooms)

• Weaknesses:• Difficulty to find single family residences that fit LiveWell and regulators criteria

• Economic breakeven point is with 4th resident

15


LiveWell SWOT analysis (continued)

• Opportunities:• Booming baby boomer population needing this type of care (see Assisted Living –

Memory Care market projections page 12.)

• Much cheaper than 24h care at patient’s home (can cost $15k-$18k/month)

• Threats:• Possible change in regulations by sector regulators: Federal, State and Local

• Breakthrough in development of medications and treatments for memory loss

patients

• Competition - Assisted living domain is intensely competitive with respect to

price. In addition, there are many well-established assisted living competitors (in

other segments of assisted living market) with substantially greater financial and

other resources than the Company and with longer proven operating histories. See list of some local 6+ residents competitors and their pricing.

16


LiveWell Business model

• Pricing:

• Care fee 1 bedroom with 1 bed – (1 resident min. 120SF) approximately

$7,500/month/bedroom

• Care fee 1 master bedroom with 2 beds (2 residents min. 160SF) –

approximately $8,500-$12,000/month/bedroom

• Plus Community fee for each resident

• Other services available “a la carte”: lessons, transport, events, excursions, etc…

• Resident continues to pay even if they are hospitalized. 30 day termination notice

required

• LiveWell is a private pay only service provider (no Medicaid or Medicare

reimbursements)

17


LiveWell Business model (continued)

• Finances:• Average net yearly income from fully occupied residence (6 Residents): $100k-

$120k

• P/L, Forecast are satisfactory (available for review with signature of Confidentiality

Agreement)

• Marketing:• Referral sources and networks

• To CCRC (Continuing Care Retirement Community), residents age 75+ go to

LiveWell, 1/3 of residents are coming from this source

• Residents coming from retirement communities (like Governor’s Club with over

900 homes).

• Key words online, SEO, Online exposure, etc.

18


LiveWell Business model (continued)

• Other:• Average length of stay per resident? 1.4 - 3 years

• When does a resident lose his/her spot in one of the homes? • End of life (different from competitors)

• Family decision

• When they cannot pay monthly fees

• Any animals allowed? Yes (subject to any home specific restrictions).

• LiveWell currently has a waiting list with new residents.

• LiveWell currently operates 6 homes in the Triangle region.

19


LiveWell property criteria

• Single level residential properties (no steps between rooms)

• Min. 3 baths and 2,700SF+

• Min. 3 common areas (ex. living room, dining room, family room, etc..)

• Ample parking space on the driveway (at least 4-5 cars)

• Locations: Wake, Orange, Durham and Chatham

• Max. 10-15min. drive to shops (no remote locations)

• Min. ¼ of a mile from nearest assisted living home

• Calm neighborhoods, away from noisy roads

• Upscale neighborhoods

• Place for two wheelchair ramps (preferably not in front of the home)

20


LiveWell Competition

• In the same segment of SFR with up to 6 patients per residence (assisted

living/memory care):

• CRC Health

• Competition extremely limited in this area and in this segment of service at this

level of organization. Barely existent.

21


LiveWell Competition (continued)

• Please see Memory care column (Big Box operators):

22


LiveWell Competition in Triangle(other types of residencies and much larger scale, numbers from 2017)

• Larger memory care (multifamily style operators):

• Brookdale Durham - Durham, NC – Alzheimer care – studio $6500-$8500

• Brookdale Meadowmont - Chapel Hill, NC

• Sunrise of Cary

• Sunrise Brighton Gardens of Raleigh

• Sunrise of Raleigh

• Sunrise at North Hills

23


Triangle residential market stats for

$500k - $801k, resale, SFR, 2501+SF

period 2005-2018Source: Infospark + MLS

24



$500k - $801k, resale, SFR, 2501+SF

period 2005-2018Source: Infospark + MLS

25



$500k - $801k, resale, SFR, 2501+SF

period 2005-2018more stats available at: https://www.dropbox.com/sh/3iw1q3r5daogf9z/AAA0P-hh4kilzET3eggcMGCwa?dl=0

26

https://www.dropbox.com/sh/3iw1q3r5daogf9z/AAA0P-hh4kilzET3eggcMGCwa?dl=0


Risk FactorsIn analyzing this offering, prospective investors should consider carefully the following factors which, individually or

cumulatively, could result in a reduction in their expected return or loss of all or a portion of their entire investment. This is

a non-exhaustive list:

• Property Related Risks

Unforeseen maintenance issues and Tenant’s use of premises could deteriorate projected income and therefore planned

ROI for this investment.

• Tenant

The success of Tenant’s operation is dependent on the management team associated with the LiveWell, and the loss of

any one of them could adversely affect results of operations. LiveWell have exclusive and complete discretion to manage

the business and operations. The Tenant’s success will be highly dependent on the effects and ability of LiveWell and their

affiliates.

• Market risk

In case of disposition of subject property, investor is subject to fluctuations of residential market and its conditions in

subject price range.

• Tax Risk

There are tax risks associated with the acquisition, holding and disposition of subject property. Therefore, prospective

investor is urged to consult their own tax advisors with regard to the federal (as well as state and local) income tax

consequences involved, with specific reference to the particular facts of their individual tax situations. Moreover, any future

changes in the tax laws and interpretations thereof (which may be given retroactive effect) could adversely affect the tax

consequences of an investment in the subject property.

• No Independent Counsel

No independent counsel has been retained to represent the interests of the Investor. The Lease Agreement and all other

documents related thereto have not been reviewed by any attorney on behalf of the Investor. Investor is, therefore, urged

to consult their own counsel at their own expense as to the terms and provisions of the proposed Lease Agreement and in

all other documents related thereto.

27


Terms and Conditions

• First come, first serve – only respondents via email providing the following items will

be shortlisted for second round of call for offers for this property

• Copy of ID if individual or copy of articles of organization if company

• Copy of most recent bank statement showing available and sufficient acquisition funds

• Funds must be available 20 days before scheduled closing and in checking account

• Please respond only via email to [email protected]

• Tenant’s Financials available after full execution of CA.

• CA link: see CREXi link??????

28

mailto:[email protected]


Terms and Conditions• Colliers International is exclusively representing the Seller/owner of option to purchase only.

• Buyer’s agents are welcome but no compensation is offered to buyer’s agent (in case buyer is

represented by one) for this particular deal.

• Property can be and is recommended to be viewed right after fully executed Offer to

Purchase.

• In case of multiple offer situation, there will be a call for the highest and best offer

communicated via email to all interested parties.

• Lease agreement between Live Well and buyer (future landlord) will be executed

simultaneously with sale documents at the time of the closing.

29


Terms and Conditions

• Elected buyer expressly agrees that in the case he/she backs out of contract to purchase the

LiveWell property, the buyer will deliver all produced documents regarding the property,

including, but not limited to, any home inspections, surveys, well and septic inspections, etc,

at no additional cost to the next buyer brought in, to take his place.

• Please make sure you fully understand all the terms and conditions of this engagement prior

to deciding to place your candidature for acquisition of subject property.

30


Additional Investor services

Property management is available with Colliers International RDU to investors for additional fee

• 10% management fee

• Hourly rate (a la carte) for maintenance services, eviction services, etc.

31


FAQs

• Q: Are there any complaints by neighbors and HOAs for existing LiveWell homes?

• A: There have been complaints regarding the presence of group homes in certain

neighborhoods. However, LiveWell’s ability to operate it’s care homes is protected by

state and federal laws.

• Q: Are there unsightly wheelchair ramps in the front of properties?

• A: LiveWell uses a host of aesthetically pleasing design strategies to minimize the view

of any unsightly ramps at it’s properties.

• Q: Does LiveWell needs to follow any of NC state regulatory guidelines when it comes

to the property they will occupy?

• A: Yes.

• Min. of 2 wheelchair ramps per property.

• Full sprinkler system.

• Min. 32” clearance for doors and 36” for hallways.

32


Deal brought to you by Colliers International RDU

Colliers Team

• MILOS RADOJKOVIC | Vice President

• Focused on achieving excellence for his clients, Milos Radojkovic specializes in

investment properties throughout continental USA. Chosen by Jim Anthony and Colliers

International for his extensive experience in commercial real estate, condo development

projects, and corporate and investment banking, making him a unique asset for all

acquisition and disposition requirements. Over the last 5 years, Milos has held an

annual lecture at UNC Chapel Hill Kenan Flagler Business School for their

Undergraduate and Executive MBA students on the world of investment sales.

33


DISCLAIMERThis Offering Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Property or the owner of the

Property (the “Owner”) to be all-inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial

projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other

factors beyond the control of the Owner and Colliers International RDU. Therefore, all projections, assumptions and other information provided and made herein are subject to material

variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made

available to interested and qualified prospective purchasers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These

summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and

other documents of whatever nature independently and not rely on the contents of this Offering Memorandum in any manner.

Neither the Owner or Colliers International RDU, nor any of their respective directors, officers, Affiliates or representatives make any representation or warranty, expressed or implied,

as to the accuracy or completeness of this Offering Memorandum or use of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a

possible purchase of the real property.

The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any

entity at any time with or without notice which may arise as a result of review of this Offering Memorandum. The Owner shall have no legal commitment or obligation to any entity

reviewing this Offering Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed,

delivered and approved by the Owner and any conditions to the Owner’s obligation therein.

CONFIDENTIALITY AGREEMENT

This is a confidential Offering Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the

Property. By receipt of this Offering Memorandum, you agree that this Offering Memorandum and its contents are of a confidential nature, that you will hold and treat it in strictest

confidence and that you will not disclose this Offering Memorandum or any of its contents to any another entity without the prior written authorization of the Owner or Colliers

International RDU. You also agree that you will not use this Offering Memorandum or any of its contents in any manner detrimental to the interest of the Owner or Colliers International

RDU. If after reviewing this Offering Memorandum, you have no further interest in purchasing the Property, kindly return this Offering Memorandum to Colliers International RDU.

DISCLAIMER

The information contained in this document has been obtained from sources believed reliable. While Colliers International RDU does not doubt its accuracy, Colliers International RDU

has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections,

opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on

tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to

determine to your satisfaction the suitability of the property for your needs. Photos herein are the property of their respective owners and use of these images without the express written

consent of the owner is prohibited. Colliers International RDU and the Colliers International logo are service marks of Colliers International and/or its affiliated or related companies in

the United States and other countries. All other marks displayed on this document are the property of their respective owners.

AFFILIATED BUSINESS DISCLOSURE

Colliers International RDU operates within a global family of Colliers companies with many subsidiaries and/or related entities (each an “Affiliate”) engaging in a broad range of

commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. In

some cases. The names of these Affiliates show no reference to the Colliers Affiliation. At all times different Affiliates may represent various clients with competing interests in the same

transaction. For example, this Offering Memorandum may be received by our Affiliates, including AACRE Properties, LLC; AACRE, LLC. Those, or other, Affiliates may express an

interest in the property described in this Offering Memorandum (the “Property”) may submit an offer to purchase the Property and may be the successful bidder for the Property. You

hereby acknowledge that possibility and agree that neither Colliers International RDU nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate

in the sale or purchase of the Property. In all instances, however, Colliers International RDU will act in the best interest of the client(s( it represents in the transaction described in this

Offering Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but

rather will conduct its business in a manner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Offering Memorandum.

34


WORKING WITH REAL ESTATE AGENTSWhen buying or selling real estate, you may find it helpful to have a real estate agent assist you. Real estate agents can provide many useful services and work with you in different

ways. In some real estate transactions, the agents work for the seller. In others, the seller and buyer may each have agents. And sometimes the same agents work for both the

buyer and the seller. It is important for you to know whether an agent is representing you as your agent or simply assisting you while acting as an agent of the other party. This

brochure addresses the various types of agency relationships that may be available to you. It should help you decide which relationship you want to have with a real estate agent. It

will also give you useful information about the various services real estate agents can provide buyers and sellers, and it will help explain how real estate agents are paid.

Sellers

Seller’s Agent: If you are selling real estate, you may want to “list” your property for sale with a real estate firm. If so, you will sign a “listing agreement” authorizing the firm and its

agents to represent you in your dealings with buyers as your seller’s agent. You may also be asked to allow agents from other firms to help find a buyer for your property. Be sure to

read and understand the listing agreement before you sign it. Your agent must give you a copy of the listing agreement after you sign it. Duties to Seller: The listing firm and its

agents must promote your best interests be loyal to you follow your lawful instructions provide you with all material facts that could influence your decisions use reasonable skill,

care and diligence, and account for all monies they handle for you. Once you have signed the listing agreement, the firm and its agents may not give any confidential information

about you to prospective buyers or their agents without your permission so long as they represent you. But until you sign the listing agreement, you should avoid telling the listing

agent anything you would not want a buyer to know. Services and Compensation: To help you sell your property, the listing firm and its agents will offer to perform a number of

services for you. These may include helping you price your property advertising and marketing your property giving you all required property disclosure forms for you to complete

negotiating for you the best possible price and terms reviewing all written offers with you and otherwise promoting your interests. For representing you and helping you sell your

property, you will pay the listing firm a sales commission or fee. The listing agreement must state the amount or method for determining the sales commission or fee and whether

you will allow the firm to share its commission with agents representing the buyer.

Dual Agent: You may even permit the listing firm and its agents to represent you and a buyer at the same time. This “dual agency relationship” is most likely to happen if an agent

with your listing firm is working as a buyer’s agent with someone who wants to purchase your property. If this occurs and you have not already agreed to a dual agency relationship

in your listing agreement, your listing agent will ask you to amend your listing agreement to permit the agent to act as agent for both you and the buyer. It may be difficult for a dual

agent to advance the interests of both the buyer and seller. Nevertheless, a dual agent must treat buyers and sellers fairly and equally. Although the dual agent owes them the

same duties, buyers and sellers can prohibit dual agents from divulging certain confidential information about them to the other party. Some firms also offer a form of dual agency

called “designated agency” where one agent in the firm represents the seller and another agent represents the buyer. This option (when available) may allow each “designated

agent” to more fully represent each party. If you choose the “dual agency” option, remember that since a dual agent’s loyalty is divided between parties with competing interests, it is

especially important that you have a clear understanding of what your relationship is with the dual agent and what the agent will be doing for you in the transaction.

Buyers

When buying real estate, you may have several choices as to how you want a real estate firm and its agents to work with you. For example, you may want them to represent only

you (as a buyer’s agent). You may be willing for them to represent both you and the seller at the same time (as a dual agent). Or you may agree to let them represent only the

seller (seller’s agent or subagent). Some agents will offer you a choice of these services. Others may not.

35


WORKING WITH REAL ESTATE AGENTS (continued)Buyer’s Agent

Duties to Buyer: If the real estate firm and its agents represent you, they must promote your best interests be loyal to you follow your lawful instructions provide you with all material

facts that could influence your decisions use reasonable skill, care and diligence, and account for all monies they handle for you. Once you have agreed (either orally or in writing) for

the firm and its agents to be your buyer’s agent, they may not give any confidential information about you to sellers or their agents without your permission so long as they represent

you. But until you make this agreement with your buyer’s agent, you should avoid telling the agent anything you would not want a seller to know.

Unwritten Agreements: To make sure that you and the real estate firm have a clear understanding of what your relationship will be and what the firm will do for you, you may want to

have a written agreement. However, some firms may be willing to represent and assist you for a time as a buyer’s agent without a written agreement. But if you decide to make an

offer to purchase a particular property, the agent must obtain a written agency agreement before writing the offer.

If you do not sign it, the agent can no longer represent and assist you and is no longer required to keep information about you confidential. Be sure to read and understand any agency

agreement before you sign it. Once you sign it, the agent must give you a copy of it.

Services and Compensation: Whether you have a written or unwritten agreement, a buyer’s agent will perform a number of services for you. These may include helping you find a

suitable property arrange financing learn more about the property and otherwise promote your best interests. If you have a written agency agreement, the agent can also help you

prepare and submit a written offer to the seller. A buyer’s agent can be compensated in different ways. For example, you can pay the agent out of your own pocket. Or the agent may

seek compensation from the seller or listing agent first, but require you to pay if the listing agent refuses. Whatever the case, be sure your compensation arrangement with your

buyer’s agent is spelled out in a buyer agency agreement before you make an offer to purchase property and that you carefully read and understand the compensation provision.

Dual Agent: You may permit an agent or firm to represent you and the seller at the same time. This “dual agency relationship” is most likely to happen if you become interested in a

property listed with your buyer’s agent or the agent’s firm. If this occurs and you have not already agreed to a dual agency relationship in your (written or oral) buyer agency

agreement, your buyer’s agent will ask you to amend the buyer agency agreement or sign a separate agreement or document permitting him or her to act as agent for both you and

the seller. It may be difficult for a dual agent to advance the interests of both the buyer and seller. Nevertheless, a dual agent must treat buyers and sellers fairly and equally. Although

t he dual agent owes them the same duties, buyers and sellers can prohibit dual agents from divulging certain confidential information about them to the other party. Some firms also

offer a form of dual agency called “designated dual agency” where one agent in the firm represents the seller and another agent represents the buyer. This option (when available)

may allow each “designated agent” to more fully represent each party. If you choose the “dual agency” option, remember that since a dual agent’s loyalty is divided between parties

with competing interests, it is especially important that you have a clear understanding of what your relationship is with the dual agent and what the agent will be doing for you in the

transaction. This can best be accomplished by putting the agreement in writing at the earliest possible time. Seller’s Agent Working With a Buyer If the real estate agent or firm that

you contact does not offer buyer agency or you do not want them to act as your buyer agent, you can still work with the firm and its agents. However, they will be acting as the seller’s

agent (or “subagent”). The agent can still help you find and purchase property and provide many of the same services as a buyer’s agent. The agent must be fair with you and provide

you with any “material facts” (such as a leaky roof) about properties. But remember, the agent represents the seller not you and therefore must try to obtain for the seller the best

possible price and terms for the seller’s property. Furthermore, a seller’s agent is required to give the seller any information about you (even personal, financial or confidential

information) that would help the seller in the sale of his or her property. Agents must tell you in writing if they are sellers’ agents before you say anything that can help the seller. But

until you are sure that an agent is not a seller’s agent, you should avoid saying anything you do not want a seller to know. Sellers’ agents are compensated by the sellers.

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About Colliers InternationalColliers International is a leader in global real estate services, defined

by our spirit of enterprise. Through a culture of service excellence and

a shared sense of initiative, we integrate the resources of real estate

specialists worldwide to accelerate the success of our partners.

When you choose to work with Colliers, you choose to work with

the best. Our highly skilled experts are passionate about what they

do. We connect through a shared set of values which shapes a

collaborative environment in our organization in ways that are

unsurpassed in the industry.

This is evident throughout our platform-—from Colliers University,

our proprietary education and professional development platform, to

our client engagement strategy that encourages cross-functional

service integration.

That’s why we attract top recruits and have one of the highest

retention rates in commercial real estate. Colliers International has

been recognized as one of the “best places to work” by top business

organizations across the globe.

It’s a world we care about too. At Colliers, we’re deeply committed to

socially and environmentally responsible business practices—the kind

that keep our communities healthy, while supporting the long-term

success of business. It’s the Colliers way.

Our ServicesThe foundation of our service is based in the strength and depth of

our specialists. Through careful listening and a system of

uncovering client needs, we understand the subtle business drivers

behind key real estate decisions. We design truly customized

services to transform real estate--often one of the largest expenses

for a business—into a competitive advantage. We do that as

professionals who know our communities and industries inside and

out. Whether you are a local firm or a global organization, we

provide creative solutions and ease in managing all of your real

estate needs.

Colliers International

colliers.com

Brokerage

• Landlord Representation

• Tenant Representation

Corporate Solutions

Capital Markets and

Investment Services

Project Management

Property Marketing

Real Estate Management

Services

Research Services

Valuation & Advisory Services

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