Real estate site selection and preliminary due diligence are critical steps when starting a commercial real estate development project. Choosing the right site can determine the success of the project, while conducting preliminary due diligence can help identify any potential risks or obstacles that may arise during the development process. Here are some tips on how to approach site selection and preliminary due diligence for your next commercial real estate development project.

Site Selection

When selecting a site for your commercial real estate development project, it is important to consider a variety of factors, including:

Location: Look for a site that is easily accessible and visible from major roads or highways. It should also be in an area with high traffic counts, and in a neighborhood that is growing or stable.

Zoning: Make sure the site is properly zoned for the intended use of the development. This may involve working with local government agencies to obtain necessary permits and approvals.

Size: Consider the size of the site and the intended size of the development. It should be large enough to accommodate the project, but not so large that it is difficult to manage.

Environmental Factors: Check for any environmental concerns or issues that may need to be addressed, such as hazardous waste or endangered species habitats.

Market Demand: Determine the level of demand for the type of development you are planning in the surrounding area. This will help ensure that there is a market for the project.

Preliminary Due Diligence

After selecting a site, it is important to conduct preliminary due diligence to identify any potential issues or risks that may arise during the development process. This may include:

Title Search: Conduct a title search to ensure there are no liens or encumbrances on the property.

Survey: Conduct a survey of the property to ensure that the site boundaries are accurate and there are no encroachments or easements that may affect the development.

Soil Analysis: Conduct a soil analysis to determine the soil type and any potential soil contamination.

Environmental Assessment: Conduct an environmental assessment to determine if there are any environmental concerns or issues that need to be addressed.

Infrastructure Assessment: Determine the availability of infrastructure, such as water, sewer, and electricity, and the costs associated with connecting to these services.

Market Analysis: Conduct a market analysis to determine the level of demand for the type of development you are planning in the surrounding area.

Site selection and preliminary due diligence are critical steps when starting a commercial real estate development project. By carefully considering location, zoning, size, environmental factors, and market demand during site selection, and conducting a thorough title search, survey, soil analysis, environmental assessment, infrastructure assessment, and market analysis during preliminary due diligence, you can help ensure that your project is successful and profitable.