CRE Due Diligence Checklist: The 10 Things We Check First

Due diligence periods are short and the list of things that can go wrong is long. These are the ten items we run down first on every acquisition, before we get deep into anything else.

1. Title and Survey

   Pull the title commitment and ALTA survey before anything else. Easements, encroachments, and unresolved liens show up here—and they are the hardest things to unwind late in a deal.

   
   
   
   

2. Rent Roll and Lease Abstracts

   Cross-check the rent roll against the actual leases, not just the broker’s summary. Confirm base rent, escalations, expiration dates, and any tenant options—such as renewal, expansion, or termination—that could change the income picture.

   
   
   
   

3. Environmental — Phase I

   A clean Phase I ESA is table stakes. If there is any history of industrial use, dry cleaners, gas stations, or auto repair on the site, budget time for a Phase II before you are locked into a hard deadline.

   
   

   

   
   

4. Zoning and Permitted Use

   Confirm that the current use is actually permitted, not just grandfathered in. A legal non-conforming use can limit what you are allowed to rebuild if the property is ever damaged or redeveloped.

   
   
   
   

5. Historical Financials

   Get three years of actual operating statements, not pro formas. Compare actual NOI to what is in the OM—the gap between the two reveals how aggressive the seller’s assumptions are.

   
   
   
   

6. Property Condition Assessment (PCA)

   A third-party PCA catches deferred maintenance—such as roof, HVAC, parking lot, or structural issues—before it becomes your capital expense in year one. Use it to true up your reserve assumptions.

   
   
   
   

7. Tenant Estoppels

   Estoppels confirm that what the leases say is actually true from the tenant’s perspective—including rent, term, concessions, and disputes. Any daylight between the lease and the estoppel is worth a second look before closing.

   
   
   
   

8. Service Contracts and Vendor Agreements

   Check what is assignable and what isn't, and flag anything with an above-market rate or an unusual termination clause. These carry forward unless you address them before closing.

   
   
   
   

9. Insurance and Claims History

   Loss run reports show you what has actually happened at the property—not just what the seller discloses. Recurring claims on the same system are a signal worth chasing down.

   
   

   

   
   

10. Market Comps

    Pull current rent comps and recent sales comps for the submarket. This grounds your exit assumptions—if the comps don’t support the pro forma rent growth, neither will your underwriting.

    
    
    
    

Skipping any one of these usually won't kill a deal on its own—it just shows up later, as a number you didn’t see coming. If you’re underwriting an acquisition and want a second set of eyes on the diligence, reach out to BPG.

Adam Collins, SIOR

SVP, Commercial Real Estate & Investments

BPG Holdings