explaining a property condition assessment
DESCRIPTION
Property condition assessments are a vital step during the transfer of ownership of a commercial real estate property. Not only do they identify physical deficiencies, building code violations, and other issues with a building that may affect the purchase price, they project long and short term cost estimates associated with owing the property. Not only does this reduce risk of owning the property, but the commercial property owner gains a sense of accuracy when making short and long term financial decisions associated with the property in the form of a property condition report. Learn about the property condition assessment process, how they're associated with the ASTM E2108, and why they're such a necessary step in the transfer of ownership of a commercial property.TRANSCRIPT
Explaining a Property Condition Assessment
PM Environmental
What is a Property Condition Assessment?
A Property Condition Assessment (PCA) is an engineering due diligence project of a commercial real estate property.
PCA’s are typically conducted during the transfer of ownership of commercial property.
You can think of PCA’s as very detailed “home inspections” except of a commercial property.
A property condition assessment must be conducted in accordance with ASTM E2018 – the Standard Guide for Property Condition Assessments.
Why Get a PCA?
Property Condition Assessments (PCA’s)
ensures that the purchase of a property
is a worthwhile investment for the
buyers and/or lenders.
PROPERTY CONDITION ASSESSMENTS ALLEVIATE UNCERTAINTY AND REDUCE
RISK WHEN ASSESSING THE REAL VALUE OF A PROPERTY.
During the purchase of a commercial building, a property condition assessment may be required by the lender.
There are Three Main Components of a Property
Condition Assessment.
Site VisitA specialist surveys a building and identifies• Physical Deficiencies of a building’s systems.• Necessary short term & long term maintenance.
InterviewsMeeting with building owners and other stakeholders to determine.• Age of building• Building and Property Components• Plus More!
Document ReviewReviewing a variety of documents helps unearth.• The age of the building.• Building and/or fire code violations.• Physical deficiencies.• Efforts to remove physical
deficiencies.• Plus more!
In conclusion of a Property Condition
Assessment, a
Property Condition Report
(PCR) is compiled.
A Property Condition Report may include details of:• Deficiencies discovered.• Budgetary costs associated with
deficiencies.• Descriptive text describing materials,
and systems of the building.• Photographs of the property and
building.
Deficiencies with the building will be categorized by level of importance, and the PCR will highlight issues that need to be taken care of as soon as possible.
The Property Condition Report can be referred to by lenders to ensure liabilities associated with the building are taken care of, and by buyers to negotiate the purchase price.
To Learn More about PCA’s, visit PM Environmental’s
PCA Service page.