Acquisition
Definition and meaning of Acquisition in real estate.
Acquisition is the process of gaining ownership or control of a real estate property, typically through a purchase, exchange, foreclosure, or lease agreement. This term is widely used in commercial real estate and investment sectors to describe the initial phase of property ownership.
In more detail
The acquisition process begins with identifying a property, conducting a preliminary evaluation, and making an offer. Once the seller accepts, the buyer enters a due diligence period to inspect the property, review financial records, and conduct a title search. This phase is crucial for investors to confirm that the asset meets their return requirements and has no hidden liabilities. A successful acquisition concludes with the transfer of the title and the closing of the transaction.
Key facts
| Category | Real Estate Investing |
|---|---|
| First phase | Sourcing and underwriting |
| Critical step | Due diligence and title check |
| Applies to | Residential, commercial, and land purchases |
A real estate investment trust completes the acquisition of a shopping center after verifying the leases of the current tenants and securing commercial financing.
Frequently asked questions
What is the difference between an acquisition and a transaction?
An acquisition refers specifically to obtaining ownership of an asset, while a transaction is the broader process of executing the deal between buyer and seller.
How does due diligence affect an acquisition?
Due diligence allows the buyer to investigate the physical and financial health of the property, which can lead to price renegotiation or cancellation of the acquisition if issues are found.
Related terms
Sources & references
See our sources and editorial standards.