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Georgetown University Atrium
Georgetown University Atrium
What are Property Condition Assessments?
Property Condition Assessments (PCAs) are classified as engineering due diligence projects associated with commercial real estate. Effectively they are more detailed versions of home inspections and have similar (and additional-see below) value propositions. Oftentimes they are done as part of a property transfer and are done along with a Phase I Environmental Site Assessment.
Facility Condition Assessments are a component of Property Condition Assessments. Facility Condition Assessments, as the name implies, are basically detailed written reports/assessments of a facility's condition. These assessments provide the Findings and Recommendations for repairs. They cover all aspects seen from a visual survey as well as some measured studies, but they are meant to be non-intrusive surveys. These studies cover site, structure, life and safety, fire, accessibility (commonly known as ADA issues), interior building elements, mechanical, electrical and plumbing disciplines.
They are done in both equity and debt markets. On the equity side these reports primarily have value to the purchaser in that they can understand the issues and the potential costs associated with owning a property. The Property Condition Report (PCR) would be used in these cases to negotiate the purchase price much like a home inspection. These reports tend to be very detailed, may require a number of specialists to evaluate the various building systems (e.g. HVAC, Elevators) and can cost $20,000 to $100,000 or even more.
In debt markets, the reports have the value of letting the lender know that the borrower will likely have sufficient cash flow to operate, maintain and update the property over the course of the loan. This provides some assurance to the lender that loan will be repaid or in the worse case, the property will not decline in value in the situation they have to sell it to recoup their loan amount.
ADCS is currently providing a facility condition assessment for the Department of Transportation in Puerto Rico for over 30 facilities. ADCS specializes in providing assessments for compliance of the existing buildings to relevant building codes to include accessibility, exterior building envelope design compliance, fire and life and safety, and egress. ADCS also teams with Mechanical/Electrical/Plumbing sub-consultants to determine the condition and capabilities of the existing HVAC systems and to make recommendations for improvements.
Dave Chan has provided such studies for large commercial projects as well as large public sector projects, including the Walter Reed Army Hospital and George Meany Center. Accurat surveys, reporting of findings, and recommendations are all important in helping to then quantify the scope of future design alterations.
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