Confirm the income
Reconcile lease terms, amendments, rent, reimbursements, options, guaranties, and landlord obligations.
Buyer’s field guide
Net lease due diligence.
A familiar tenant and long lease can simplify the story, but not the work. A disciplined review tests the lease, tenant obligation, physical real estate, title, environmental condition, income, and exit before the diligence period expires.
The review sequence
Run four workstreams at once.
Do not wait for one lane to finish before beginning the next. Lease, physical, title, environmental, financing, and closing issues can affect each other—and every day matters.
Test the obligation
Identify the tenant and guarantor, assess credit support, and understand the operating concept.
Inspect the real estate
Review condition, access, title, survey, environmental risk, zoning, and alternative use.
Protect the closing
Coordinate financing, estoppel, SNDA, insurance, entity approvals, and closing deliverables.
Core checklist
Documents to request and questions to answer.
The exact list depends on the property and lease. Begin with a comprehensive request, then narrow the analysis around material risks.
Lease and income
- Executed lease, amendments, exhibits, side letters, and guaranties
- Current rent schedule, increases, options, and lease expiration
- Expense responsibilities, reimbursements, caps, and exclusions
- Estoppel requirements, defaults, notices, and landlord consents
- Assignment, subletting, casualty, condemnation, and termination rights
Tenant and guarantor
- Exact legal entities and organizational relationship
- Corporate, franchisee, operator, or special-purpose credit support
- Available financial statements, unit performance, and sales reporting
- Concept durability, store network, competitive position, and closure history
- Existing litigation, defaults, restructuring, or material business changes
Property and site
- ALTA survey, title commitment, easements, and reciprocal agreements
- Phase I environmental report and relevant prior environmental records
- Property-condition assessment, roof, structure, systems, and deferred maintenance
- Zoning, certificates, permits, access, parking, signage, and utilities
- Market rent, replacement cost, demographics, traffic, and alternative uses
Transaction and closing
- Purchase agreement dates, remedies, representations, and closing conditions
- Financing approvals, appraisal, reserves, insurance, and lender deliverables
- Estoppel and SNDA form, timing, and acceptance standards
- Closing statement, prorations, security deposits, and transfer notices
- Entity authority, tax advice, 1031 coordination, and post-closing obligations
Common misses
Three shortcuts that create expensive surprises.
The largest problems often come from an assumption that was never tied back to a signed document, physical report, or closing condition.
Relying on the OM
Offering materials summarize the opportunity. The lease, amendments, title documents, reports, and purchase agreement control the transaction.
Stopping at tenant credit
Even strong credit does not fix weak access, above-market rent, poor alternative use, or a lease with hidden landlord obligations.
Waiting on execution items
Estoppels, SNDAs, lender conditions, surveys, and third-party reports can become closing risks when addressed late.
Due-diligence FAQ
Practical questions before the clock starts.
Build the team and the request list before signing whenever possible.
How long should diligence take?
The appropriate period depends on property complexity, document availability, financing, and required third-party reports. Confirm that the contract timeline is realistic before execution.
Is an estoppel enough to verify the lease?
No. An estoppel can confirm important facts, but it should be reviewed alongside the full lease file, payment history, notices, and transaction documents.
Do I need a new survey and Phase I?
Current lender, title, insurer, and investor requirements vary. Determine early whether existing reports can be relied upon or updated.
What if an issue is discovered?
Evaluate materiality, cost, contractual rights, available cures, pricing or structure alternatives, and the effect on financing and exit liquidity with qualified advisers.
Considering a net-lease acquisition?
Start diligence before the contract clock does.
Stonecliff helps investors source opportunities, organize property information, compare risks, and coordinate the real-estate workstream through closing.
This checklist is educational and is not exhaustive. Property and transaction requirements vary. Stonecliff provides real estate brokerage services and does not provide legal, environmental, engineering, tax, or accounting advice. Engage qualified independent professionals.