Retail Pad Site Due Diligence: A Development Checklist

A pad site looks simple on a site plan: a rectangle, a curb cut, a parking count. In my experience the rectangle is the easy part. What sits under it, around it and on the public record is where a project gains or loses months, and where a budget quietly grows.

I came to development through law school and financial due diligence work, so I read a pad site the way I learned to read a quality-of-earnings file. Start with what can be proven, list what cannot, and price the gap. This is the checklist I work through before anyone signs a lease or a purchase contract on a retail pad.

Diligence is not a box you check at the end. It is the process of turning assumptions into documents.

What should a retail pad site due diligence checklist include?

Six areas, in roughly this order. Each one feeds the next. A title exception shows up on the survey; the survey tells you whether the zoning setbacks work; the setbacks drive where utilities can enter; and utilities and access together decide whether the building a tenant wants actually fits.

• Title: the commitment, every Schedule B exception and copies of each recorded document.
• Survey: an ALTA survey that plots those exceptions, the boundary, flood zone and improvements.
• Zoning: permitted use, dimensional standards, parking, signage and any drive-through rules.
• Utilities: capacity, tap and impact fees, extension costs and who pays for them.
• Access: curb cuts, cross-access easements, turning movements and highway permits.
• Environmental: a Phase I assessment, and a Phase II if the Phase I calls for one.

What am I looking for in the title commitment?

I read every Schedule B exception, not just the summary page. Recorded easements, declarations and restrictive covenants can limit use, signage, hours or the kinds of businesses that can operate. A covenant that protects an existing user's category elsewhere in a development can quietly remove a concept from the list of possible tenants. I want copies of every recorded document, not someone's description of them.

Why does an ALTA survey matter on a small pad?

Because small pads have no slack. The survey should plot every easement from the title commitment, show the legal boundary against the curbs and fences on the ground, and confirm the parcel touches a public right-of-way or has a recorded access easement to one. I also ask for a flood zone determination and, where it matters, utility locations. If the survey and the title commitment do not agree, I stop and reconcile them before anything else.

How do you confirm zoning allows the intended use?

Get it in writing where you can. A zoning verification letter from the municipality, or at least a documented conversation with planning staff, tells you whether the use is permitted by right, needs a conditional or special use permit, or is not allowed at all. Then check the dimensional standards: setbacks, height, parking ratios, landscaping, signage and drive-through stacking. Use and dimensions are separate questions, and a project can pass one and fail the other.

Which utility questions slow projects down?

Capacity and cost, not just availability. A line in the street is not the same as a tap you can use. I ask each provider about water and sewer capacity, tap and impact fees, whether the sewer is gravity or needs a lift station, gas and electric service size, and who pays for extensions. A restaurant with a grease interceptor or a medical user with a heavy electrical load can change the answer for the same pad.

What does access really mean for a retail site?

Whether a customer can get in and out without frustration. That means curb cuts that are permitted or permittable, workable turning movements, cross-access easements with neighboring parcels, and any highway access permits. On a highway corridor like U.S. 169, the agency that controls the road has a say in how a site connects to it, so I confirm the current approvals rather than assume them.

When do you need a Phase I environmental site assessment?

On nearly every acquisition. A Phase I reviews historical uses, regulatory records and site conditions, and it is part of how a buyer positions itself for the defenses available under federal environmental law. Former fuel stations, dry cleaners and auto uses deserve extra attention. If the Phase I identifies a recognized environmental condition, a Phase II with sampling may follow, and the schedule should allow for that time.

This is general information, not tax or legal advice; talk to your own tax adviser and qualified intermediary. For any specific site, involve your own attorney, surveyor and engineer as well.

How do diligence findings show up in the project math?

Every unresolved item becomes a cost, a delay or a lease contingency. I like to put findings straight into a yield-on-cost model so the whole team sees what an unplanned lift station or turn lane does to the return. Try it with the example below, then add a hypothetical utility extension to the hard cost.

In an example like that, a single unplanned item moves the yield by a meaningful amount. On a small pad, that can be the difference between a project that pencils and one that does not. My colleague Ben Nelson works through the income side in his piece on NOI-first underwriting, and I cover the return math in my article on yield on cost.

How does this apply at The Shops at Smithville?

At The Shops at Smithville, north of Kansas City on U.S. 169, a tenant is not starting from a bare field. A prospective tenant still needs its own review for its own use, and a medical or dental practice will ask different questions than a franchise restaurant. The available spaces are Suite 400 (1,400 SF), Suite 500 (2,100 SF), Suite 600 (5,180 SF) and the standalone 14901 South Building (10,000 SF).

If you are evaluating one of them, start with the site plan and brochure on the main Smithville page, then read the page for your segment, such as medical and dental or franchise and QSR.