moving it to a location that is currently between by gas furnace and
gas dryer. There will be ~2-3 feet between each.
Furnace ---2.5ft-- Hot Water ---2.5ft-- Dryer

Assuming all code is applied when moving it .... an issue?

I can't see a problem with that.. In our former house, thats how it was:

HW/Furnace side by side..in a smaller closet off the laundry room...
External wall..Hi & low vents to outside air and the dryer was just outside
the closet in the laundry area.