What make/model is it? How old? Does it have an after cooler in it? They refer to it as a "hot or high inlet temp" (HIT) dryer, they have built in after coolers before the refrigeration part of the dryer. it will also have a fan inside to draw air thru the after cooler, it will cool the incoming compressor air to ambient temp which allows a closer placement to the compressor. They also have built in filters that need replaced from time to time, make sure it is clean they can go for quite a while before they need serviced depending on how hard it was used.
The ones without an after cooler built in should have either an after cooler installed between the compressor and the unit or placed at a distance or have enough air line to cool the incoming air before the dryer. That distance or the amount of line between the two will depend on how hard the compressor is worked while in use. Even a one man show can run the snot out of an air compressor when grinding, sand blasting using a DA etc. the tank will get very warm if not hot from time to time.
Mine is a Hankinson HIT35 (35CFM) and is placed 2 1/2ft from my compressor tank connected with a flexible high pressure hose. They are made to run and dry an entire shops air system so I say use it for that you will be in good shape.