Originally published on March 13, 2024, by Kathryn Atkins for NAIOP.
Although this year’s I.CON West conference is taking place in California, much of the due diligence session applies to the rest of the country. In all aspects of due diligence, the goal is the same: How do we get the project for our investors through the approval cycle with the least risk, time and expense?
In a panel session, four experts discussed slightly different aspects of due diligence practices (political; biological and resource; California Environmental Quality Act, if applicable; and site selection). Still, the take-home consensus was how properly executed due diligence can give the developer leverage with the growing number of naysayers in cities, counties and states across the United States.
How do commercial real estate leaders work through increasingly difficult objections to building and growth? Say it doesn’t cost money to mitigate the challenges to the project and each due diligence – it can still push the timeline and invite more “bounty hunters” (those seeking to derail the project and exact a gatekeeper fee for stepping aside). It’s not worth it to some folks, while others with a higher risk tolerance might be willing to forgo the due diligence. It’s a risk.