Due Diligence Checklist for Commercial Real Estate Developers
A Philadelphia commercial real estate attorney should be consulted by any commercial real estate developers who are undertaking any type of new development project or who are evaluating any type of land purchase. Investing in commercial real estate can be a lucrative but risky endeavor, especially when buying raw land and when developing that land. You not only have the uncertainty of the real estate market when you are doing new development, but you also face potential risks because the challenges of using the raw land for its intended purpose may not be immediately clear.
Curley & Rothman, LLC understands the risks that are associated with the development of new commercial real estate. We know the ins-and-outs of real estate development and how the laws in Pennsylvania apply to property development. We can help developers to do their due diligence on projects of all sizes so you can make smart investments and informed choices that allow you to grow your real estate portfolio while minimizing risk.
Due Diligence Checklist for Developers of Commercial Real Estate
When buying land for commercial real estate development, it is your responsibility to do your due diligence to make sure that the land is going to be a viable place for your proposed development project. While the sellers of land must make certain disclosures to you, the doctrine of caveat emptor, or buyer beware, also applies in the field of commercial real estate. This means it is up to you to do the research that you need into all aspects of the land purchase so you can make wise investments.
Some of the different considerations on your due diligence checklist should include:
- What interest you are acquiring? Will you be getting only an interest in the land? Are you also acquiring buildings or fixtures; development rights; or any other rights?
- Is the land appropriate for your planned use of the property? Is there room for parking? Can you make appropriate structural improvements?
- Are there any environmental issues? Has there been any risk of environmental contamination that could result in you being forced to clean up the property?
- What are the legal restrictions associated with the use of the property? Do the zoning laws allow the land to be used for your intended purpose? Are there any private land use controls that could affect your ability to develop the land for its intended purpose?
- Can you obtain necessary licenses? If the property will be used as a restaurant or entertaining establishment, are their liquor licenses available? Will you need an outdoor dining license? Are you allowed to put a drive-thru on the property?
- What is the cost to acquire the land? You need to know more than just the purchase price. Are there other costs associated with acquiring or using the property?
- Are there any issues that could affect development costs? Will you need to make special provisions for drainage? Do you need to acquire road access?
- Are there encroachments on the property? Do you need to worry about easements or encumbrances? Are their liens on the property? Are there outstanding leases that you may be bound to honor or any covenants on the land?
These are just some of the many different things that should be on your due diligence checklist if you are undertaking a commercial real estate development project. A Philadelphia commercial real estate attorney can provide you with advice on all of the different factors that you must take into account based on the specifics of the current project that you are undertaking.
Getting Help from a Philadelphia Commercial Real Estate Attorney
Whenever you are making a substantial investment, you need to make smart choices when it comes to what projects to undertake. This is especially essential in the field of commercial real estate development, where there are myriad uncertainties associated with the ability to use the land effectively for your intended purposes.
Curley & Rothman, LLC brings a strong legal perspective to the table, as well as knowledge of Pennsylvania's real estate market and the laws that govern the development of real estate. We can provide comprehensive help to clients in doing their due diligence to ensure that they make smart choices throughout the development process. Give us a call today at 610-834-8819 or contact us online to find out more about the ways in which a member of our legal team can assist you with doing your due diligence for a commercial real estate development project that you have become involved in.