What is a due diligence investigation in a commercial real estate transaction?

A due diligence investigation in a commercial real estate transaction is a process conducted before closing on a property that includes examining the existing documents related to the property and any existing leases, conducting a review of the title and any related permits, researching the zoning regulations, and performing additional inspections to assess the physical condition of the property. The purpose of the due diligence process is to determine the value of the property and the accuracy of any existing documents that pertain to the property. In Florida, the due diligence investigation process typically includes a review of the title to make sure that there are no unresolved liens or other encumbrances, a review of any existing leases, and inspections of the property regarding any building code violations or environmental issues. Depending on the nature of the transaction, an appraisal may also be conducted to determine the fair market value of the property. The due diligence investigations can also include researching the zoning regulations for the area and consulting with local officials about any future development plans that may affect the value of the property. In addition, if the property has a history of litigation, the due diligence process should include a review of the court records to make sure that any legal action is resolved. In short, a due diligence investigation in a commercial real estate transaction is an important step in the process of completing a purchase. It is an assessment of the existing documents and of the physical condition of the property to ensure that all potential issues and liabilities are accounted for prior to closing.

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What is a due diligence investigation in a commercial real estate transaction?

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