Pri's Perspective
The Ghosts in
the Machine
In Commercial Real Estate, what you don’t see is often more important than what you do.
"What you don't know can't hurt you?"
Investors like to call these "Ghost Risks." They are the skeletons hidden in the drywall or buried three feet under the parking lot that don't show up until after the ink is dry and the wire has cleared.
01. Phase II Nightmares
A property can look like a pristine parking lot today, but if a dry cleaner or a gas station stood there in 1974, you might be inheriting a multimillion-dollar plume.
The Fix: Never, ever waive an environmental contingency—especially on adaptive reuse projects.
Field Note:
"I've seen deals fall apart because of Vapor Intrusion. Even if the soil is remediated, toxic vapors can seep into the building’s foundation."
Sketch of recorded easement vs. build-site
02. Invisible Boundaries
You might hold the deed to the land, but a forgotten utility easement from the 1920s could prevent you from ever expanding your footprint.
The Fix: A standard boundary survey won't find these ghosts; an ALTA survey will.
03. The "Double" Cap Rate Trap
The Seller's Story
8.2% "Pro-Forma"
Based on market rents the property has never seen and expenses that ignore future tax resets.
The Reality
5.8% "In-Place"
Once the county reassesses the property at your purchase price, that yield evaporates.