Site assessment addresses broad issues such as location, neighboring uses, and transportation access. Once a site is located, then a more detailed investigation is required to determine whether the intended use of the property is achievable at reasonable cost. This is known as due diligence, and typically happens once a contract for the purchase of the site has been executed. Time for due diligence varies greatly, typically ranging from 120 days to 270 days. One of the first tasks in the due diligence process is to acquire an accurate survey of the site. This may take upwards of 30 days. Until a survey is in hand, most of the other elements of due diligence simply can’t proceed with any specificity. The intended use of the site may be severely limited by local zoning and other regulations. If the intended use does not comply with any existing zoning or regulation impacting the site, either the site must be abandoned, or a petition be filed to amend the zoning regulation to permit the intended use. Zoning regulation petitions may be as short as 60 days, or if public hearings are required, could be 90 to 180 days before a final determination is made by the governing authority.
In future blogs we will address the many other elements that need to be performed during the due diligence period so that any surprises after closing are minimized, or at least financially quantified which may impact the final closing price paid for the site.