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Administrative and Financial

Real Estate, International Property Purchase/Sale/Lease Protocols

Scope

University-wide

Policy Statement

The general principles outlined in these protocols apply to all Syracuse University units wishing to purchase or lease real property outside of the United States, or wishing to dispose of real property outside of the United States already owned by the University.

Long Term Program Planning

All University units interested in operating an international operation shall prepare a Program and Space Outline for each one of the contemplated international sites. The outline shall address:

Current Programs

  • Description of current programs offered at each site, including an assessment of the University's commitment to maintaining the existing programs and retention of program space.
  • Evaluation of the current program space utilization with emphasis on functionality (including a breakdown of current space allocation between administrative, classroom, academic support and public space); suitability; code compliance including life safety and fire protection; appropriate zoning; access; attractiveness; related operating costs.

New Programs and Existing Space

  • Proposed future programs for each site.
  • Assessment of the existing space's capability of supporting proposed new program elements.
  • Modification of existing space, additional or new space required for future programs with projected facility costs, including specific program requirements, such as specialized space, laboratories, computer access, darkrooms, etc., and associated proposed occupant capacities and projected square footage.

New Space

  • Budget analysis, including estimated cost of modified or additional/new space, proposed funding for modified or additional space with possible offsets through disposition of current properties, savings in facility operating costs, property taxes, etc. The analysis should include projected costs for a professional realtor, legal services, certified translation services, market analysis or appraisal, environmental assessments, and property and liability insurance mandated by the host country and/or necessary to protect the University's interest. Political risk insurance to guard against political violence, currency inconvertibility and expropriation of University property shall be considered in any analysis.
  • Outline shall take into consideration the economic stability and political climate in each host country and the time period for the University's commitment to maintaining a presence in each host country.

The basic Program and Space Outline for each international site must be approved by the University before the search for new/additional space begins. The following University departments are to be consulted in preparing the outline: Office of Campus Planning, Design & Construction, Office of Budget & Planning, Risk Management, Real Estate Office, and Treasurer's Office. The basic Program and Space Outline for each international site needs to be approved in writing by the by the respective Dean, Department Head or Director and the Vice Chancellor and Provost (if an Academic Unit) or Designated Cabinet Officer (if an Administrative Unit). A copy of the approval letter shall be provided to the Chancellor and the Executive Vice President and Chief Financial Officer.

Protocol for Locating and Purchasing New or Additional Space

After the Program and Space Outline for a site has been approved by the Vice Chancellor and Provost (if an Academic Unit) or Designated Cabinet Officer (if an Administrative Unit), the process of locating space will be directed and managed by the Executive Vice President and Chief Financial Officer, including, but not limited to review and authorization of steps taken to locate appropriate space, and select the project manager, local real estate professionals, attorneys, architects, appraisers, and brokers retained to advise the University, according to directives issued by the Executive Vice President and Chief Financial Officer. A request to commence the process of locating space should be provided to the Executive Vice President and Chief Financial Officer at least six months prior to the anticipated move in date.

Since the real estate market and sales practices differ from host country to host country, services shall be retained of a trained and reputable real estate professional, licensed to conduct business in each host country, to advise and represent the University's interest in each transaction; a local real estate attorney to review and oversee any proposed property transaction from a legal standpoint and to advise the University on tax and title issues; a local insurance agent/broker to advise the University on insurance matters germane to the host country; and professionals to advise the University on compliance with environmental and other local government regulations.

The following checklist shall be followed once a suitable property is located.

  • A property assessment detailing how the proposed property meets the program needs approved in the basic Program and Space Outline shall be approved by the respective Dean, Department Head or Director and the Vice Chancellor and Provost (if an Academic Unit) or Designated Cabinet Officer (if an Administrative Unit).
  • An independent market analysis or appraisal supporting the proposed purchase price of the property and prepared by a real estate professional licensed to prepare such an analysis or appraisal in the host country, shall be forwarded to the Real Estate Office for its review and comments. It shall contain an evaluation of the property's current zoning and suitability for educational use; it shall also address whether the property has any historic or other significant architectural designation that would impact the proposed rehabilitation of the property for the University's intended use. It shall also identify all ingress and egress points to the property from public streets, availability of on-site and public parking and access to public transportation. Photographs and maps of the property and its surrounding neighborhood shall be included. The market analysis or appraisal shall also include a description of construction or public works projects known or planned in the vicinity of the property which may impact the University's intended use of the property. The independent market analysis or appraisal will be forwarded to the Executive Vice President and Chief Financial Officer for approval.
  • A detailed financial analysis to include: the proposed purchase price, funding source(s) for the purchase price, due diligence investigative assessment of the property, rehabilitation costs and their funding source, ongoing operating costs (utilities, insurance, real estate taxes, interior, exterior and grounds maintenance, etc.) and their funding source shall be forwarded to the Office of Budget and Planning for review and approval. The financial analysis must address regulations specific to the host country that would affect a future sale of the purchased property such as financial penalties for removing sales proceeds from the host country. A copy shall be provided to the Treasurer's Office. The Office of Budget and Planning will forward the financial analysis to the Executive Vice President and Chief Financial Officer for approval. The Property Purchase Formula worksheet attached as Appendix A to this protocol shall be used.
  • After approval by the Vice Chancellor and Provost (if an Academic Unit) or Designated Cabinet Officer (if an Administrative Unit) and the Executive Vice President and Chief Financial Officer, the transaction will be provided to the Chancellor for approval, reported to the Facilities Committee of the Board of Trustees for information, and will be submitted to the Executive Committee of the Board of Trustees for its approval to proceed with the contemplated transaction.
  • After the Executive Committee of the Board of Trustees approves to proceed with the transaction, an attorney licensed to do business in the host country must be retained to advise on local regulations; a detailed exterior and interior property description, including square footage, floor plans, and architectural and mechanical drawings must be commissioned and forwarded to the Office of Campus Planning, Design & Construction for review and approval; a detailed engineering evaluation, including a complete structural assessment, assessment of the HVAC system, boilers, electrical, water and sewer service, sprinkler and security system, elevators and handicapped accessibility shall be forwarded to the Office of Campus Planning, Design & Construction for review and approval. These evaluations shall be performed by a duly qualified engineering and/or architectural firm licensed to do business in the host country. All evaluations should be current
  • A current site survey prepared by a surveyor licensed to do business in the host country showing the property lines and all easements or right of ways shall be forwarded to the Real Estate Office for review and approval.
  • A current environmental report, performed by a qualified and appropriately licensed professional in the host country, including a history of the property's prior uses and neighborhood data shall be forwarded to the Risk Management Department and the Environmental Health and Safety Services Office for review and approval. The report must be performed in accordance with standards and requirements specific to the host country of the proposed purchase and must conform to most recent recommendations published by the American Society for Testing and Materials (ASTM) or equivalent standards accepted in the host country. The report must contain the results of a complete asbestos survey; as well as testing for lead in paint or plumbing fixtures; mercury; radon; and other known hazardous materials including but not limited to waste water discharge, bulk petroleum tanks, etc. unique to the geographic area of the proposed purchase which may pose a human health risk.
  • An insurance report (including copies of insurance policies) detailing the coverage necessary for complying with compulsory insurance requirements in the host country, satisfying all contractual requirements, guarding against potential liabilities, protecting property and income streams, shall be submitted to the Risk Management Department for review.
  • Completion of a hazard analysis, such as whether the property is contained within a flood zone, is at risk for major hurricanes, tsunamis, earthquakes or other natural disasters, or is within the emergency planning or evacuation zone of a nuclear reactor.

If the required documents noted above cannot be provided to the University prior to execution of a proposed purchase contract, a contract shall be prepared that includes contingencies allowing the University to pursue a possible purchase with the provision to terminate the purchase contract if, in the University's sole discretion, the documents reveal information that preclude the University from finalizing the purchase, provided that such contract contingencies are allowable and legal in the host country. The purchase contract shall include a reasonable time frame for the University to perform its due diligence review. If any of the documents listed above are drafted in a language other than English, a certified English translation must be attached to its original before its submission to the appropriate unit on campus for review.

The Offices of Campus Planning, Design & Construction, (CPDC), Risk Management, Real Estate, Budget and Planning and the Treasurer shall submit their findings and recommendations based on the review of the property description and engineering evaluation, site survey, environmental report and insurance report to the Executive Vice President and Chief Financial Officer in writing. The Executive Vice President and Chief Financial Officer shall issue a recommendation in writing to the Chancellor with a copy to the Vice Chancellor and Provost (if an Academic Unit) or the Designated Cabinet Officer (if an Administrative Unit) whether the transaction should proceed.

If the Chancellor, after reviewing the recommendations of the Executive Vice President and Chief Financial Officer, approves going forward with the purchase, the Chancellor shall have the Executive Vice President and Chief Financial Officer submit a proposed purchase recommendation to the Facilities Committee of the Board of Trustees for its review. The Facilities Committee shall submit it to the Executive Committee of the Board of Trustees for its approval. Upon approval by the Executive Committee, the following checklist shall be followed to close on the property purchase:

  • A purchase contract shall be prepared and reviewed by a local attorney following local real estate laws and business practices. The purchase contract must be in the language of the host country with a certified translation into English. The contract must be reviewed by the Real Estate Office and the offices of the University's General Counsel in Syracuse, New York. Upon satisfactory legal review, the purchase contract will be executed by the Executive Vice President and Chief Financial Officer on behalf of the University, or by the duly authorized signatory of the University in the host country.
  • A copy of the deed or equivalent document, abstract of title or equivalent document, and all other documents customarily associated with a property purchase in the host country must be reviewed and approved by the local attorney. If the deed must be prepared in the language of the host country, a certified English translation must be obtained. A copy of all documents should be provided to the offices of the University's General Counsel in Syracuse, New York and to the Real Estate Office at Syracuse University for review and approval.
  • A final detailed property description including year built, type of construction, insurable replacement value and description of fire protection and security systems shall be forwarded to the Risk Management Department for its review and procurement of necessary and adequate insurance coverage beyond what is procured locally in the host country. This report shall include the anticipated closing date of the purchase.
  • Prior to closing, a property inspection attended by a staff member designated by the responsible Dean, Department Head or Director and approved by the Real Estate Office shall be scheduled and any deficiencies noted must be corrected prior to closing. A copy of the inspection report shall be forwarded to the Risk Management Department and CPDC.
  • Once a closing date has been set, arrangements for an international wire transfer shall be made with the University's Treasurer's Office.
  • The closing must be attended by the local attorney and any other staff required to be in attendance in accordance with the laws and practices of the host country.
  • A copy of the closing statement must be provided to the Comptroller's Office so the purchased asset can be properly recorded by the University.

Protocol for Sale of Property

In accordance with the assessment in the Program and Space Outline, a unit responsible for the international property shall recommend to the Vice Chancellor and Provost (if an Academic Unit) and to the Executive Vice President and Chief Financial Officer (if an Administrative Unit) in writing that an international property holding be offered for sale. The recommendation shall include the reasons why the University should divest itself of the property, the proposed time frame of the sale and an estimated sales price. The recommendation shall provide a description of all fixtures and furnishings included in the proposed sale. If the Vice Chancellor and Provost and the Executive Vice President and Chief Financial Officer approve the proposed sale, the transaction shall be forwarded to the Chancellor for approval. If the Chancellor approves in principle that the property shall be offered for sale, the checklist below shall be followed to effectuate the sale. All documents must be in the language of the host country and a certified English translation must be provided. The Executive Vice President and Chief Financial Officer will direct and manage, including but not limited to review and authorization of the steps to be taken to dispose of the property, and select local real estate professionals, attorneys, appraisers, and brokers retained to advise the University according to the directives issued by the Executive Vice President and Chief Financial Officer.

  • An independent property appraisal or market analysis shall be obtained from a real estate professional licensed to provide such an appraisal or analysis in the host country, showing a range of market value for the property and forward it to the Real Estate Office for its review and determination of a proposed asking price. If fixtures and furnishings are included in the proposed sale, the appraisal shall include an appraised value for these items.
  • The proposed sales price shall be approved by the Executive Vice President and Chief Financial Officer, the Chancellor, and the Facilities and Executive Committees of the Board of Trustees.
  • Services shall be retained of a trained and reputable real estate broker, licensed to do business in each host country, to market the property; and of a local real estate attorney or other qualified professional to review and oversee any proposed sales from a legal standpoint and to advise the University on tax and title issues. A copy of the proposed listing agreement with the real estate broker shall be prepared by the local attorney, and forwarded to the offices of the University's General Counsel in Syracuse, NY, and to the Real Estate Office for review and approval. Any listing agreement shall contain language that a sale is subject to the approval of the Executive Committee of the Board of Trustees. A percentage commission rate no higher than the customary commission rate in the host country shall be agreed upon before the listing agreement is signed by the Executive Vice President and Chief Financial Officer or by the duly authorized signatory of the University in the host country.

If the University receives a bona fide written, signed purchase offer within the range of the asking price, the following checklist shall be followed:

  • The purchase offer shall be reviewed in accordance with local laws and business practices by the local attorney. A certified translated copy shall be provided to the Offices of the University's General Counsel in Syracuse, NY, and the Real Estate Office for review and concurrence.
  • The Real Estate Office shall issue a recommendation to the Executive Vice President and Chief Financial Officer whether the University should accept the offer.
  • The Executive Vice President and Chief Financial Officer will forward a recommendation to the Chancellor with a copy to the Vice Chancellor and Provost (if an Academic Unit) or the Designated Cabinet Officer (if an Administrative Unit).
  • If the Chancellor approves going forward with the proposed sale, a sales recommendation shall be submitted by the Executive Vice President and Chief Financial Officer to the Facilities Committee of the Board of Trustees. If the Facilities Committee concurs, it shall forward its recommendation to the Executive Committee of the Board of Trustees for its approval.
  • If the Executive Committee approves the sale, the Executive Vice President and Chief Financial Officer or the duly authorized signatory of the University in the host country shall sign the contract on behalf of the University. If a down payment is tendered as part of the purchase offer, the down payment shall be deposited in the appropriate Syracuse University real estate purchases and sales chart string.

The following check list shall be followed to close on the transaction:

  • The local attorney shall commence title work, including preparation of a proposed deed or equivalent document and update the abstract of title or equivalent document. Copies of all documents shall be provided to the Offices of the University's General Counsel and the Real Estate Office for review and approval. The documents shall be certified translated into English.
  • If required by local law or by the sales contract, arrangements shall be made to have a property survey updated and provide it to the purchaser, and also provide the purchaser with any other documents or drawings related to the property.
  • The University unit responsible for the international property holding shall make arrangements with local utility companies, contractors, and service providers to have all services that are in the University's name terminated as of the closing date.
  • Once a closing date has been set, a proposed closing statement detailing all financial adjustments shall be prepared by the local attorney and forwarded to the Offices of the University's General Counsel and the Real Estate Office for review and approval. A copy shall be sent to the Treasurer's Office for review and approval.
  • An original deed or equivalent document shall be sent to the Executive Vice President and Chief Financial Officer or the duly authorized signatory for the University in the host country for signature.
  • The Treasurer's Office shall issue instructions for an international wire transfer to receive the proceeds of the sale.
  • The deed or equivalent document shall be held in escrow by the local attorney until the international wire transfer is received by the University.
  • Proceeds from the sale shall be deposited in the appropriate Syracuse University real estate purchases and sales chart string. A copy of the closing statement shall be forwarded to the Comptroller's Office so the disposition of this asset can be properly recorded by the University.

Protocol for Leasing New or Additional Space

After the Program and Space Outline for a site has been approved, the alternative of leasing new or additional space may be considered. A request to commence the process for locating leased space should be provided to the Executive Vice President and Chief Financial Officer at least six months prior to the anticipated move in date. The Executive Vice President and Chief Financial Officer will direct and manage, including but not limited to review and authorization of the steps to be taken to locate appropriate space and select local real estate professionals, attorneys, architects, and brokers retained to advise the University, according to directives issued by the Executive Vice President and Chief Financial Officer and in accordance with the Real Property Leasing Policy approved by the University's Facilities Committee of the Board of Trustees.

Since the rental markets differ from host country to host country, services shall be retained of a local trained and reputable real estate professional, licensed to do business in each host country, to represent the University in its search for leased space. Once suitable space is located, the following checklist shall be followed. All documents should be in the language of the host country and a certified English translation must be provided.

  • A written description of the leased space, including a description of the location of the leased space, including the neighborhood surrounding the leased space; a hazard analysis of the location, including identification of flood zones, risk of being in the path of a major hurricane or tsunami, earthquake, or other natural disaster, or within an emergency planning or evacuation zone for a nuclear reactor; floor plan; interior and exterior photos; description of parking facilities, security systems, and all other amenities included with the leased space, and detailing how the proposed leased space meets the program needs approved in the Program and Space Outline shall be forwarded to the Vice Chancellor and Provost for review and approval (if an Academic Unit) or the Designated Cabinet Officer for review and approval (if an Administrative Unit). A copy shall be provided to the Office of Campus Planning, Design & Construction. If the proposed leased space is for residential purposes, the University's Fire and Safety Questionnaire must be completed and must be approved by the University's Risk Management Department and Public Safety.
  • The financial details of the lease, including lease rate, lease term, security deposit, inclusion of utilities or other services, renovation costs, furnishings, renewal options, and landlord/tenant rights and obligations under the lease shall be provided to the Office of Budget and Planning for review and approval. The University unit wishing to lease an international property shall also identify the proposed funding source for the lease payments to the Office of Budget and Planning and to the Vice Chancellor and Provost (if an Academic Unit) or the Designated Cabinet Officer (if an Administrative Unit) including identification of the chart string(s) that will fund the lease payments. Any lease agreement in excess of $50,000 in annual lease payments must be reported to the University's Facilities Committee of the Board of Trustees and approved by Executive Committee of the Board of Trustees.
  • Upon approval by the Vice Chancellor and Provost (if an Academic Unit) or the Designated Cabinet Officer (if an Administrative Unit) and the approval of the Executive Vice President and Chief Financial Officer, Executive Committee of the Board of Trustees approval, if the lease is in excess of $50,000, to go forward with the lease must be obtained. An actual lease document shall be prepared by a local real estate attorney. The lease document shall be drafted in accordance with all local laws and real estate business practices. The document shall be in the language of the host country and a certified English translation must be obtained. If a satisfactory lease termination clause cannot be negotiated, the University unit wishing to lease the space must account for the financial exposure in its analysis provided to the Budget Office, including a projection of continued lease, utility and insurance payments, program and staff termination costs and write-off of fixtures, furniture, equipment and improvements, and provisions for funding these expenditures. Any lease document shall include a clause that permits the University to sublease the leased premises with the Landlord's consent, which shall not be unreasonably withheld, provided such a provision is legal in the host country. If a satisfactory subleasing clause cannot be negotiated, the unit wishing to lease the space must account for the financial exposure in its analysis provided to the Budget Office, including a projection of continued lease, utility and insurance payments.
  • A copy of the lease shall be provided to the Risk Management Department for review and for procurement of appropriate insurance coverage.
  • A copy of the lease shall be provided to the University's Real Estate Office and to the Offices of the University's General Counsel for review and approval. The lease document shall be signed by the Executive Vice President and Chief Financial Officer or the duly authorized signatory for the University in the host country.
  • After the lease agreement is signed, the unit leasing the international space shall make all necessary arrangements to commence lease payments and procure utility and other services not covered by the lease.


Appendix A
International Property/Purchases/Leases Protocol

PROPERTY PURCHASE FORMULA

AVAILABLE FUNDS

Available balance in chart string to be charged (identify chart string): $______________
Less money to be retained in chart string: $______________
Funds available for purchase: $______________

ESTIMATED COSTS

Building purchase: $______________
Taxes on purchase: $______________
Legal fees: (1) $______________
Renovation expenditures: $______________
Moving expenses: $______________
New F, F & E: $______________
Travel: (1) $______________
Engineers, consultants and certified translation costs:(1) $______________
Real estate commissions: $______________
Insurance: $______________
Other costs: (2) $______________
TOTAL ESTIMATED COSTS: $______________

Notes: Include VAT on all taxable items, if VAT is applicable.

  1. Purchase evaluation, tax advice, contract documents to conclusion of purchase.

  2. Any obligations on current leases or other obligations related to the operation of current building(s) that might be vacated or sold until completed sale or termination.


Policy Administration

Links to Procedures and Related Information

Amended: September 26, 2000
Amended: September 12, 2002
Amended: September 30, 2003
Amended: July 27, 2004
Amended: August 9, 2013, 2004


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