Asking commercial real estate questions before buying property obviously makes a lot of sense. You want to make sure you are making a wise investment. But knowing which commercial real estate questions to ask can make all the difference in the world…and save you a lot of potential headaches down the road. To help get you started, we’ve compiled a list of a few questions to ask your broker.

  1. Does the property have a clear title? During the due diligence period, buyers are furnished with a full title report disclosing all encumbrances against the property. Having a clear title will protect you from any ownership challenges.
  2. Are there any tenants occupying the space? Your broker can provide you with a rent roll which will tell you who each tenant is, how much rent they pay, what the terms of each lease are, when leases expire, and when leases are increased and how often.
  3. What are the expenses and income for the building? Asking your broker for a pro forma will help you determine the building’s net operating income. You want to make sure that you will have a decent monthly profit.
  4. Does the survey match the indicated property lines? Surprisingly, some sellers are not aware of the exact property lines. You will want to make sure that the seller has not built into neighboring property or vice versa. Ask your broker for a recent property survey.
  5. Is the property zoned for your proposed use? Verify with the city or county that the zoning code permits your intended use of the property. Re-zoning property is sometimes possible, but it can cost extra time and money. Best to know ahead of time if your intended use is allowed.
  6. Are there any major structural issues? Before purchasing a property, you should consider obtaining an inspection report that outlines repairs that have been done to a building. Such repairs could include electrical, plumbing, elevators, fire sprinklers, etc. Due diligence documents are also good to obtain. You want to have a good handle on what improvements or repairs the current owner has taken care of or neglected.
  7. Are there any environmental issues? Obtaining environmental assessment reports can help you avoid concerns with how the property has been or will be used.
  8. What other developments are in the area? It is helpful to know what else is going on around the property. New business coming to an area will often increase the value of surrounding property, but competing businesses can drive existing tenants out.

Of course, there are many other commercial real estate questions to ask your broker. At the Menlo Group, we understand that investing in property involves many more commercial real estate questions. With our extensive experience, we can help you get the answers you need so you can make wise investment decisions.

Commercial Real Estate Questions