CRE Buyer Due Diligence Checklist
Due diligence is the structured process commercial buyers use to verify everything they were told about a property before committing real money at closing. In Salt Lake City, a strong due diligence period typically runs 45 to 60 days, and using it well separates clean acquisitions from painful surprises discovered after the deal closes.
The financial review comes first because numbers drive everything else. Request trailing 36 months of operating statements, current rent roll, copies of every lease and amendment, lease estoppels from each tenant confirming current terms, utility bills for the last 12 months, property tax bills for the last three years, insurance loss runs, and any capital expenditure history. Reconstruct NOI from those documents independently rather than trusting the broker’s package. The gap between marketing NOI and verified NOI runs 10 to 25 percent on the typical Wasatch Front listing, almost always in the seller’s favor.
Physical inspection covers the building itself. Hire a commercial building inspector or a contractor with commercial experience to walk the property systematically. Roof age and condition. HVAC systems with serial numbers checked against age. Plumbing and electrical capacity. Foundation and structural elements. Parking lot condition. Site drainage. ADA compliance, particularly on older buildings. Salt Lake City specific concerns include seismic vulnerability on unreinforced masonry buildings downtown and in Sugar House.
Environmental due diligence is mandatory on industrial property and recommended on most older commercial. A Phase I environmental site assessment costs $2,500 to $4,500 and takes 2 to 3 weeks. The assessment researches historical uses, regulatory records, and visible site conditions. Phase I reports flag concerns rather than confirm contamination. If Phase I identifies recognized environmental conditions, Phase II sampling may be needed at significantly higher cost. Lenders require Phase I on most industrial loans and on many commercial loans across the Wasatch Front.
Title and survey work runs in parallel. The title commitment lists exceptions including easements, restrictive covenants, encroachments, and unrecorded leases that the buyer will take subject to. Some exceptions are routine. Others can limit what the buyer does with the property. Survey work confirms boundaries, improvements, easements on the ground, and any encroachments by or against neighbors. ALTA surveys cost $3,000 to $6,000 depending on property size and complexity.
Zoning verification confirms that the intended use is allowed. A buyer planning to operate light manufacturing in a building zoned commercial needs to know whether that use is permitted, requires conditional use approval, or requires rezoning. Each path has different costs and timelines. Salt Lake City and the surrounding municipalities each have different codes, so checking the specific jurisdiction matters.
Lease estoppels from tenants confirm what the seller represented about leases. Each tenant signs a document confirming current rent, lease term, security deposit, no defaults, and any side agreements. Estoppels protect the buyer from discovering after closing that a tenant had a verbal modification, a deferred rent agreement, or some other arrangement not reflected in the lease file.
Lender coordination runs throughout. The appraisal, environmental, title, and lease estoppels all need to clear lender requirements. Buyers who let lender underwriting drift to the back of the schedule often find themselves out of contingency period without final approval, which forces hard choices between extending the contract or losing earnest money.
Omada Commercial, known as best commercial real estate agents in Salt Lake City, manages due diligence checklists for buyers across the Wasatch Front, coordinating consultants and tracking deliverables so the contingency period actually produces clear information rather than rushed work near the deadline.
