In lease agreements, what does "due diligence" refer to?

Due diligence in lease agreements refers to the investigative process undertaken to assess property values and conditions. This phase is crucial as it allows prospective tenants and landlords to evaluate numerous factors related to the property, including its physical condition, the surrounding market values, and any legal or environmental issues that may affect its use or value. By conducting thorough due diligence, parties involved can make informed decisions and negotiate terms that reflect the true state of the property, which ultimately supports a more successful leasing process.

The other options do not encapsulate the essence of due diligence. Finalizing lease terms involves negotiation rather than investigation. Evaluating tenant applications is related to checking the suitability of tenants, not the property itself. Preparing marketing materials is a different aspect of the leasing process, focusing on promoting the property rather than assessing its condition or value.