The CRE due diligence checklist, organized the way deals close.

Property diligence: the asset itself

Property diligence answers whether the collateral is what the underwriting says it is. The document family runs from income evidence through physical condition:

• Certified rent roll

  Current, certified by the borrower, and reconciled against the leases themselves. Discrepancies between rent roll and leases are an underwriting event, not a formality.
• Leases and amendments

  The full set for every tenant the credit decision relies on, with abstracts for the majors. Watch co-tenancy clauses, termination options, and expense stops.
• Tenant estoppels

  Confirming the lease terms from the tenant's side. Start these immediately; tenants respond on their own clock.
• Property condition report

  Deferred maintenance and immediate repairs feed reserve requirements and escrow holdbacks.
• Phase I environmental site assessment

  To the current ASTM E1527-21 standard. Its recommendations, sometimes a Phase II, become new checklist lines the day it lands.
• Zoning report or letter

  Confirms legal use, parking counts, and rebuild rights. Legal nonconforming status changes the insurance conversation.
• Appraisal

  FIRREA-compliant on regulated transactions above the interagency half-million-dollar commercial threshold, with independent review.

Financial diligence: the income and the sponsor

Financial diligence tests the cash flow and the people behind it:

• Operating statements

  Trailing periods per your credit policy, tied to the rent roll and the tax returns. Stale statements trigger re-underwriting in the final weeks.
• Real estate tax bills and assessments

  Including any open appeals, abatements, or PILOT arrangements that change the expense line.
• Utility and service contracts

  Anything that survives closing: management agreements, laundry leases, cell tower licenses, solar arrangements.
• Sponsor financial statements and schedules of real estate owned

  For guarantors, current within the window credit policy requires, with liquidity verified.
• Credit, background, and OFAC screens

  On the borrower and the guarantors, documented in the file for the examiner who will ask.

Title, survey, and insurance

The title commitment's Schedule B is a to-do list disguised as a report: requirements to satisfy before the policy issues, and exceptions to accept, insure over, or remove. Each exception the lender will not live with becomes its own diligence line with an owner. The ALTA survey, negotiated through its Table A items, has to match both the legal description and what the title company is willing to insure; survey revisions after title comments are normal and belong in the calendar.

Insurance diligence is wording work. Liability comes on an ACORD 25 certificate, property evidence on an ACORD 28, and the mortgagee clause, loss payee, notice, and deductible terms must match what the loan agreement requires, not approximately match it. The flood determination runs early because a positive result changes the whole insurance stack and adds notice periods no one can compress.

Borrower and entity diligence

Entity diligence proves the borrower can legally do the deal. Formation certificates, operating and partnership agreements, resolutions, incumbency certificates, and good standings for every entity in the chain, plus the organizational chart that shows how they connect. Single-purpose entities bring their own covenants and, on larger deals, non-consolidation opinion requirements.

The classic failure is the consent nobody knew about: a member two tiers up whose approval the operating agreement requires, discovered during the signature packet review. Reading the org documents against the org chart in week two is what prevents it.

Running the checklist without drowning in it

The full list on a real deal runs well past a hundred lines, and five parties touch it. Three disciplines keep it moving. One list, not five copies, so the borrower, both counsel, and title read the same status. An owner and a due date on every line, with reminders routed to whoever owes the item. And a weekly read of the whole board by the closer, so quiet lines get loud before they cost calendar.

The borrower experience is part of the diligence system, not a courtesy. A borrower who sees one organized list of what to deliver, uploads without a login, and watches items check off delivers faster and calls less. TruStone Financial's commercial team cut its daily servicing status email by 75% after moving document flow onto Prodeal, and the same mechanism, visible status instead of asked-for status, is what moves diligence.