Due Diligence

Financial Due Diligence

• Rent roll verification — tenant names, leases, rent, escalations, options
• Trailing 12-month (T12) operating statements — reconcile against rent roll and bank deposits
• Tax returns (typically 3 years) — verify reported NOI
• Tenant financial statements (where available) — credit assessment
• Lease abstracts of all material leases — confirm key terms
• Concession history — free rent, TI/LC, build-outs, ongoing landlord obligations
• Arrears report — past-due rent and collection history
• Service contracts — property management, landscaping, security, vendors
• Operating expenses — actual costs by category, contract pricing

Physical Due Diligence

• Property Condition Assessment (PCA) — Engineering inspection of all major systems and components
• Roof inspection — Critical in Florida; age and condition drive insurance availability and pricing
• HVAC inspection — Florida heat means HVAC is a high-wear system
• Structural inspection — Particularly important for older properties and following any major storm
• ADA compliance review — Title III public accommodations standards
• Survey (ALTA/ACSM) — Boundary, easements, encroachments, improvements
• Environmental Phase I — Required by virtually all lenders; identifies recognized environmental conditions
• Environmental Phase II — Soil/groundwater testing if Phase I identifies issues

Legal and Title Due Diligence

• Title commitment — Review for exceptions, easements, restrictions
• Title insurance — Owner's policy + lender's policy at closing
• Survey reconciliation — Match title exceptions to surveyed conditions
• Estoppels — Tenant certifications confirming lease terms, rent paid, no defaults
• SNDAs — Subordination Non-Disturbance Attornment agreements for major tenants
• Zoning compliance letter — Confirms property complies with current zoning
• Existing loan review — If assuming, review original docs + amendments
• Litigation search — Active or threatened litigation against the property or owner

Florida-Specific Due Diligence

• Hurricane insurance binding quotes — Obtain BEFORE removing contingencies. Florida insurance crisis has created materially higher premiums and capacity issues
• Flood zone determination — FEMA flood zone (X, A, AE, V, VE) drives lender requirements and operating expenses
• Sinkhole investigation — Higher priority in west Orange, Polk, and certain other counties
• Wind mitigation report — Documents construction features that reduce hurricane insurance premium
• Documentary stamp tax + intangible tax exposure — Florida charges these on new mortgages at closing
• Property tax reassessment modeling — Florida fully reassesses commercial property at sale
• Judicial foreclosure history — If property went through Florida judicial foreclosure, additional title review
• Citizens Property Insurance exposure — If property requires Citizens coverage, assessment risk exists

What is due diligence in commercial real estate?

Due diligence is the comprehensive investigation a commercial real estate buyer conducts on a property before closing — covering financial, physical, legal, environmental, and (in Florida) hurricane insurance, flood zone, and sinkhole-specific items. The due diligence period typically runs 30 to 60 days and allows the buyer to terminate the contract if material issues surface.

How long is a typical commercial real estate due diligence period in Florida?

Florida CRE due diligence periods typically run 30 to 60 days from contract execution. Larger or more complex deals (CMBS-assumption transactions, ground-up development sites, hospitality with PIPs) may require 60–90 days. The specific period is negotiated in the purchase contract.

What is Florida-specific due diligence?

Florida CRE due diligence includes items not found in other markets: hurricane insurance binding quotes before contingency removal, FEMA flood zone determination, sinkhole investigation in higher-risk counties, wind mitigation reports, documentary stamp + intangible tax exposure calculation, post-sale property tax reassessment modeling, and Citizens Property Insurance assessment risk evaluation.

What should I do if due diligence uncovers problems?

Material issues found during due diligence are typically addressed in one of four ways: (1) negotiate a price reduction reflecting the issue, (2) require seller cure before closing, (3) place funds in escrow at closing to address the issue, or (4) terminate the contract and recover the deposit. The earlier issues surface in due diligence, the more leverage the buyer has.

Who can help me with due diligence on a Florida CRE acquisition?

Michael R. Linton at Linton Global Solutions coordinates the full due diligence process on every Florida CRE acquisition — financial reconciliation, physical inspection coordination, environmental review management, Florida-specific insurance and tax modeling, and coordination with the buyer's attorney, accountant, and lender. Call (312) 612-1031.

Article Summary

Due diligence is the comprehensive investigation a commercial real estate buyer conducts on a property before closing — financial (rent roll, T12, leases), physical (property condition, roof, HVAC, environmental), legal (title, estoppels, zoning), and Florida-specific (hurricane insurance binding quotes, FEMA flood zone, sinkhole investigation in higher-risk counties, documentary stamp tax, post-sale property tax reassessment). The due diligence period typically runs 30 to 60 days and allows contract termination if material issues surface. Michael R. Linton at Linton Global Solutions coordinates the full due diligence process on every Florida CRE acquisition.

Key Takeaways

• ✓Due diligence covers financial, physical, legal, environmental, and FL-specific items.
• ✓Typical due diligence period: 30–60 days from contract execution.
• ✓Florida-specific: hurricane insurance binding quotes, flood zone, sinkhole, wind mitigation.
• ✓Documentary stamp + intangible tax exposure must be calculated at LOI stage.
• ✓Property tax fully reassesses at sale — model post-acquisition expense.
• ✓Phase I environmental required by virtually all lenders.
• ✓Estoppels from major tenants confirm lease terms and absence of defaults.
• ✓Issues found early in due diligence carry more negotiation leverage.

About Michael R. Linton

Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39+ years of experience closing commercial transactions, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.

Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving 500+ banks.

Ready to Talk About Your Due Diligence Deal?

Get a free consultation with Michael R. Linton — 39 years of Central Florida CRE experience. Zero pressure.

Works Cited

1. ASTM International. "Phase I Environmental Site Assessment Standard (ASTM E1527)." ASTM, https://www.astm.org/. Accessed Jun 7, 2026.
2. American Land Title Association. "ALTA Survey Standards & Title Insurance." ALTA, https://www.alta.org/. Accessed Jun 7, 2026.
3. Florida Department of Business and Professional Regulation. "Florida Real Estate Commission." Florida DBPR, https://www.myfloridalicense.com/. Accessed Jun 7, 2026.
4. Federal Emergency Management Agency. "FEMA Flood Maps & Flood Insurance." FEMA, https://www.floodsmart.gov/. Accessed Jun 7, 2026.
5. Florida Office of Insurance Regulation. "Florida Insurance Regulatory Information." Florida OIR, https://floir.com/. Accessed Jun 7, 2026.

Disclosure & Compliance

Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.

Compliance Statement: All CREDDS and REOMind.ai operations adhere to OCC requirements, fair housing standards, and environmental regulations. Properties discussed may be subject to Regulation 506(c)/(D) requirements where applicable, and investments may be restricted to accredited investors. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.