Due diligence on a tenant

[Bharath Raj]

I am negotiating a lease with a physician for my medical office building. This physician is a sole proprietor. I am adding a personal guarantee into the lease. The lease is being drafted by a attorney. My broker said that they usually don't do credit checks, and instead rely on P & L/balance sheets for the last 3 years. I was a little surprised. I would assume that you need 3 years of tax returns also, if you rely on a self report of P & L/balance sheets. I would appreciate some feedback on due diligence in this scenario.