Mixed Use Due Diligence
I have a mixed use building under contract and I'm beginning my due diligence period. The building has apartments upstairs and retail on the ground floor, with a long-term tenant. I'm willing to deal with the current residential tenants, knowing I can replace them fairly easily. The retail tenant just renewed their 10 year lease just a few months ago. This all sounds great, except for the fact that I know the store had some financial troubles a few years back.
My question... What type of disclosure is typical to expect with respect to the existing retail tenant? If I were placing the tenant myself, I'd expect to see their business financials. The seller does not have info to share and is unwilling to ask. Am I right to perceive this as a red flag? How would you proceed?