3 Benefits of Completing a Property Condition Assessment (PCA) Before Closing

Buying a property can be a significant investment, and while the appeal of a real estate deal may be apparent, hidden issues could turn your dream acquisition into a financial nightmare. One crucial step to ensure you make an informed decision is to conduct a Property Condition Assessment (PCA) before finalizing the deal. Below, we’ll explore the 3 benefits of obtaining a PCA for your next real estate deal.

What is a Property Condition Assessment?

A Property Condition Assessment is a comprehensive evaluation of a building’s exterior, interior, systems, fixtures, and finished. It is recommended that an experienced consultant with familiarity with a range of building practices conduct the assessment. The scope of a typical PCA includes a site assessment, foundation and structural components, a roof evaluation, mechanical, plumbing, and electrical systems, fire prevention/life safety systems, and interior fixtures and finishes.

1. Identifying Potential Risks

The primary purpose is to identify potential risks and provide a detailed overview of the property’s current state to assist the reader in making an informed decision. Structural deficiencies, foundation issues, and the presence of obsolete and outdated construction materials such as cast-iron sanitation lines could lead to costly repairs down the line. The PCA provides for identification of deficiencies and cost recommendations for repair and remediation. The PCA also examines mechanical and electrical systems for observed deficiencies and inoperable components.

2. Financial Implications

Knowing the financial implications of a property prior to purchase is crucial. A PCA helps estimate the costs associated with repairs and maintenance, allowing buyers to factor these expenses into their budget. By understanding the potential financial impact, buyers can make more informed decisions and negotiate from a position of strength based on the assessment findings. The PCA can also provide a Replacement Reserve table to estimate future expenses based on the estimated remaining useful life of the property’s current systems, fixtures, and finishes. Additionally, a PCA provides insight into the property’s overall condition, influencing its value and potential return on investment.

3. Compliance

Ensuring a property complies with local, state, and national building codes and regulations is vital. A PCA can assist with identifying life/safety issues that may pose a hazard or hinder the property’s intended use. Our standard PCA includes a limited ADA survey and federal Fair Housing checklist that provides a limited visual observation of the property’s accessibility features.  By conducting a PCA, buyers can mitigate risk associated with undisclosed property issues.

Choosing the Right Professionals

The success of a PCA depends on the expertise of the inspection team. Buyers should prioritize hiring qualified inspectors with relevant certifications and experience. Asking the right questions and ensuring the inspection team has a comprehensive understanding of the property’s specific needs is essential for a thorough assessment.

At Moran Consultants, our PCAs are created under the current industry standards as defined by ASTM E2018-15 Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process. We also have the ability to tailor a report to agency-specific requirements such as Freddie Mac / Fannie Mae, and other local, state, and federal agencies. No matter what your needs may be, our company strives to create a personalized service that is hand-crafted to meet your standards. Give us a call at 866-545-3350 or contact us online to see how we can help you make an informed decision before making a critical investment.

What Type of Asbestos Survey Do I Need?

Asbestos, a once ubiquitous construction material known for its fire resistance and insulation properties, is now infamous for its severe health risks. To protect people from asbestos-related illnesses, asbestos surveys have become a crucial part of property management and construction. To ensure you make the best choice for your property, below is a list of the most common types of asbestos surveys and how each can be utilized.

Comprehensive Asbestos Surveys

Comprehensive Asbestos Surveys are the most detailed and encompassing type of asbestos survey. They are conducted to identify all potential asbestos-containing materials (ACMs) within a building or property. These surveys are essential for property owners and managers to ensure the safety of occupants and compliance with regulations. A comprehensive survey provides a comprehensive report outlining the location and condition of ACMs.

Limited Asbestos Surveys

Limited Asbestos Surveys are more targeted in their scope when compared to Comprehensive Asbestos Surveys. They are conducted when there are specific concerns about certain areas or materials, or when there is a need to gain general understanding of the ACM content at a property to determine if a more detailed analysis is needed. These limited screenings are often combined with our Phase I Environmental Site Assessments as an additional scope of work; however, they can also be utilized as a standalone service. While Limited Surveys are not as extensive as Comprehensive Asbestos Surveys, they serve as a valuable tool in determining whether a more extensive Comprehensive Asbestos Survey is warranted.

Limited Path-of-Construction Surveys

Limited Path-of-Construction Surveys are primarily utilized during renovation projects. These surveys focus on narrowing down the assessment to any suspect materials that could potentially be affected by the planned scope of construction renovation. The main objective of these surveys is to pinpoint any ACMs that may be impacted by the construction process. This not only ensures the safety of the workers and the project but also equips our clients with the necessary information to make informed financial decisions regarding the remediation or in-place management of any existing ACMs, as not all similar materials within a project contain asbestos and require remediation. The core objective of Limited Path-of-Construction Surveys is to precisely identify which materials necessitate remediation or in-place management for informed decision-making.

Why Choose Moran Consultants for Your Next Asbestos Survey

Asbestos surveys are indispensable tools for property management and construction projects. Choosing the right survey type, maintaining proper reporting, ensuring safety, and complying with regulations are all essential steps in dealing with the potential risks of asbestos exposure.

To ensure the utmost accuracy, compliance, and safety during asbestos surveys, it is highly recommended to hire a trusted and certified asbestos inspector. At Moran Consultants, our team of specialists has the expertise and knowledge to navigate the complexities of asbestos-related issues, making the process smoother and more secure for you and your property.

Who Needs a Phase I Environmental Site Assessment (ESA)?

Phase I Environmental Site Assessments (ESAs) stand as essential gatekeepers in real estate transactions, serving a crucial role in uncovering potential and existing environmental risks.  This comprehensive assessment provides invaluable insights into a site’s environmental history, regulatory compliance, contamination, and potential liabilities.  By undergoing a Phase I ESA, a diverse array of entities gain access to critical information that enables informed decision-making, risk mitigation, and the protection of assets in the intricate realm of real estate dealings. Let’s delve deeper into why various stakeholders in the real estate industry find this assessment to be a game-changer.

Understanding the Phase I ESA Process

A Phase I Environmental Site Assessment (ESA) is more than a technical report. It is a comprehensive process executed by Environmental Professionals (EPs) adhering to industry standards.  This investigation identifies historical environmental conditions (HRECs), controlled environmental conditions (CRECs), and recognized environmental conditions (RECs), as well as de minimis conditions of a property. This process uncovers potential environmental concerns that could impact the property, helping stakeholders address any issues before they escalate.

Key Players and Their Stakes in the Game

In the world of real estate, a Phase I ESA is a vital document that influences decision-making at every stage of a property’s life cycle. This assessment serves as a lens through which various key players in the real estate industry view a property’s environmental history and potential risks. From lenders safeguarding their investments to government agencies ensuring public safety, the Phase I ESA plays a pivotal role. Below is a list of stakeholders involved in a real estate transaction and how a Phase I ESA can benefit them.

Real Estate Developers: When eyeing a property for new development or redevelopment, Developers turn to Phase I ESAs to comprehend potential environmental challenges. Armed with this information, they can strategically plan and navigate potential obstacles.

Lenders and Financial Institutions: Banks and lending institutions incorporate Phase I ESAs into their due diligence process. This assessment acts as a risk assessment tool, safeguarding their investments by uncovering potential environmental liabilities associated with the property.

Property Buyers and Investors: Informed decisions are the bedrock of successful real estate transactions. Potential buyers and investors leverage Phase I ESAs to uncover any environmental issues that might affect the property’s value and can utilize it as a negotiating tool within their transactions.

Property Owners: Proactive property owners voluntarily conduct Phase I ESAs to identify and address potential environmental threats.  By doing so, they safeguard their property’s value and ensure compliance with regulations.

Government Agencies: For projects involving public funds or impacting public health and safety, government agencies may mandate Phase I ESAs. These assessments become crucial components of purchases, grant applications, fulfillment of tax credit programs, and more, ensuring a thorough understanding of potential environmental risks.

 

Choosing Moran Consultants for Your Phase I ESA

In the realm of a Phase I ESA, experience and expertise are paramount.  Moran Consultants, with experienced Environmental Professionals (EPs), brings a deep understanding of the regulatory landscape.  Our meticulous approach, coupled with state-of-the-art technology, ensures that our clients receive comprehensive reports that empower them to make informed decisions in their real estate transactions.

When it comes to safeguarding property investments and ensuring regulatory compliance, Moran Consultants stands as your trustworthy partner.  To partner with our team of experts or learn more about how Phase I ESAs can benefit your next real estate venture, call 866-545-3350 or send us a message today.  Your journey to informed decision-making begins with Moran Consultants.

What is Included in an Asbestos Survey?

Asbestos is a naturally occurring mineral that was once widely used in construction materials due to its excellent fire resistance and durability. Asbestos surveys are crucial in identifying existing potential risks and aiding in the decision-making process when contemplating an investment. They have become an essential part of building management, renovation, and demolition processes, but what exactly is included in an asbestos survey?

1. Identification of Asbestos-Containing Materials (ACMs): The primary goal of an asbestos survey is to locate and identify any asbestos-containing materials in a building. These materials can be found in various forms, such as insulation, floor tiles, ceiling tiles, roofing materials, etc. Surveyors are trained to recognize these materials and collect samples for testing.

2. Sample Collection: During an asbestos survey, trained professionals gather samples of suspected asbestos-containing materials (ACMs). While sampling, inspectors take all precautions to avoid the release of asbestos fibers into the air.

3. Sample Analysis: Once samples are collected, the surveyor will provide the samples to an accredited laboratory for analysis. The most common form of testing is Polarized Light Microscopy (PLM), which aims to distinguish an approximate percentage of asbestos within potential ACMs. If an accurate reading cannot be determined, other forms of analysis such as point counting may be used.

4. Assessment and Reporting: Once all samples have been analyzed, an assessment of the laboratory results will be completed by the surveyor and conveyed into a clear and concise report for the client. The report will include information such as where samples were collected, the types of materials the samples are composed of, approximately how much of the sample material is believed to be present at the site, and the estimated percentage of asbestos present within each sample material.

5. Consulting: After the report has been completed and delivered to the client, our licensed professionals are available to our clients to consult them on their next steps if any are necessary. Our asbestos surveyors are qualified, licensed, and trained professionals to ensure our clients have the necessary knowledge at their disposal to make the best decisions.

An asbestos survey is a comprehensive process that involves identifying, sampling, and assessing asbestos-containing materials in buildings. It plays a crucial role in pinpointing areas of potential liability and protecting the health and safety of individuals who may encounter any ACMs. Asbestos surveys are essential tools that assist our clients in identifying, budgeting, and planning around any future business risks. Whether you’re an investor looking to acquire or improve an asset, a property manager responsible for a commercia building, or a homeowner planning a renovation, understanding what is included in an asbestos survey is vital for ensuring compliance with regulations and safeguarding your investment.

 

Do you need an asbestos survey? Contact us online or call us at 866-545-3350 to schedule a survey with one of our asbestos specialists.

Wall Street’s Strategic Move: Capitalizing on Discounted Commercial Real Estate

In a recent article published in The Wall Street Journal titled “Wall Street Is Ready to Scoop Up Commercial Real Estate on the Cheap,” they discuss a new trend in the financial world that has emerged, capturing the attention of investors, real estate professionals, and economic analysts alike. The article highlights how Wall Street is positioning itself to take advantage of the downturn in the commercial real estate market, signaling a strategic shift that could reshape the landscape of urban development and investment practices.

Wall Street firms, including Cohen & Steers, Goldman Sachs, EQT Exeter, and BGO, are raising substantial funds to acquire distressed commercial real estate properties at significantly reduced prices compared to years prior. These firms are seeking to capitalize on the ongoing decrease in the commercial real estate market, which has been severely impacted by the upward trend in interest rates. This has especially affected the office sector due to the slow rate of employees returning to the office and higher rates of vacant spaces. Even previously attractive property types like apartment buildings and malls are facing challenges as owners struggle with refinancing at higher rates and steep value declines.

The distressed commercial real estate market has seen a notable increase in volume, with properties in default or foreclosure growing by $8 billion in the second quarter. Wall Street’s strategic move to capitalize on discounted properties has the potential to reshape urban landscapes, redefine workspaces, and influence the future trajectory of local businesses. While the strategy offers tantalizing opportunities for investors, it is not without its risks and potential consequences. As financial giants prepare to enter the market, crucial tools such as Property Condition Assessments or Phase I ESAs can play a significant role in the decision-making process.

Understanding Property Condition Assessment Reports & Phase I ESAs

A Property Condition Assessment report is a comprehensive evaluation of a property’s physical condition. Conducted by experienced professionals, this assessment aims to identify any existing or potential issues that could affect the property’s value, safety, and viability. It provides a comprehensive visual overview of the building’s structural integrity, mechanical systems, electrical components, plumbing systems, roofing, and other key aspects.

A Phase I ESA is a systematic study conducted by environmental professionals to assess the historical regulatory and current environmental conditions of a property. The goal is to identify any potential or existing environmental contamination, hazardous materials, or land use practices that might pose risks or liabilities. The assessment typically involves site visits, historical research, regulatory research, and interviews with current and past property owners.

Integration of PCAs with Investment Strategy

As Wall Street entities prepare to acquire commercial properties at discounted rates, the integration of Property Condition Assessment reports into their investment strategy is crucial. Investors should follow a structured approach as outlined below:

  1. Preliminary Screening: During the initial stages of property evaluation, consider leveraging summary reports or desktop assessments to quickly identify properties that align with investment criteria.
  2. In-Depth Analysis: For shortlisted properties, commission a comprehensive PCA report. Engage professionals with expertise in property assessments to ensure accuracy and reliability.
  3. Risk and Cost Assessment: Evaluate the findings of the PCA report in the context of potential acquisition costs, renovation expenses, and market conditions. This assessment will help gauge the true value and potential return on investment.
  4. Strategic Decision-Making: Use the insights from the PCA report to make strategic decisions about property acquisition, negotiations with sellers, and planning for expected capital obligations.

Integration of Phase I ESAs with Investment Strategy

To effectively integrate Phase I ESAs into their investment strategy, Wall Street entities should follow a systematic approach as outlined below:

  1. Preliminary Due Diligence: As properties are identified for potential acquisition, initiate preliminary research to gauge whether a Phase I ESA is warranted. Consider the property’s historical uses and neighboring land uses as potential indicators of environmental risks.
  2. Engage Environmental Professionals: Hire experienced environmental consultants to conduct thorough Phase I ESAs. These professionals possess the expertise to identify potential concerns and navigate the complex regulatory landscape.
  3. Risk Assessment: Evaluate the findings of the Phase I ESA in conjunction with financial projections and market trends. This assessment will help determine the true value of the property, accounting for potential environmental liabilities.
  4. Strategic Decision-Making: Use the insights from the Phase I ESA to make informed decisions about property acquisition and negotiations with sellers, and plan accordingly.

In the rapidly evolving landscape of Wall Street’s pursuit of discounted commercial real estate, Property Condition Assessment reports and Phase I ESAs emerge as vital assets. These reports provide a holistic understanding of a property’s current standing, enabling investors to make well-informed decisions, mitigate risks, and negotiate more effectively. As Wall Street giants position themselves to reshape urban landscapes and redefine commercial spaces, integrating these reports into their investment strategies will contribute to more successful, transparent, and value-driven outcomes.

Partner With Moran Construction Consultants Today

Moran Construction Consultants are your experts in PCAs and Phase I ESAs. With meticulous assessments and state-of-the-art technology, we ensure that our reports provide you with the information you need for your next real estate transaction. For more information about our services or to partner with our team, reach out to us at 866-545-3350 or send us a message online.

A Property Condition Assessment After Hurricane Damage

What is a Property Condition Assessment?

A Property Condition Assessment is a due diligence tool utilized by lenders, owners, and investors to evaluate the existing condition of a commercial or residential building. Although the scope of work for a Property Condition Assessment can vary, an assessment typically involves the thorough, in-person review of interior and exterior site components. This includes, but is not limited to, building foundations and structures, exterior facades, parking areas, building systems, roofing components, and interior fixtures. An outline of all requirements to meet industry standards for Property Condition Assessments can be found in ASTM E2018-15 Standard Guide for Property Condition Assessment Process.

Assessing Hurricane Damage

Did you know that The National Centers for Environmental Information reports that hurricanes have caused over $315 billion in overall damages/costs in the past 3 years? With the potential of damaging winds, flying debris, and flooding, a hurricane can leave a property in need of restorations. Hurricane Ian, for example, was a category-4 hurricane that struck Florida and South Carolina earlier this year. Leaving behind destruction that totaled between $50 billion to $65 billion in insured damages, causing the second-largest insured loss on record. No matter what the damage may be, starting the process to make repairs may seem daunting, but working alongside one of our building assessment specialists can help you examine your property and prioritize repairs.

During a Property Condition Assessment, one of our in-house consultants will observe a site for hurricane-related damages. In most cases, a property will see damages due to hurricane-force winds and catastrophic flooding. Gale force winds ranging from 75 mph – 157 mph can lead to flying debris and fallen trees that can destroy a building’s structure, windows, or roof. Flooding can lead to water intrusion, causing small leaks and other damages to the internal components of a building, such as saturated drywall or electrical damage. After outlining all storm-related damages, our consultants will evaluate them on a good, fair, or poor rating. They will also identify any immediate cost repairs, such as life/safety issues and/or short-term repairs that would require attention within the first 12 months. With this information, a restoration scope of work can be developed, making more severe damages a top priority.

Let Moran Construction Consultants Help You Assess Your Hurricane Damage

Assessing damages after a natural disaster may seem daunting, but utilizing a Property Condition Assessment from Moran Construction Consultants can help you prioritize repairs and return your property to a safe and sanitary condition. With over 50 years of industry experience, our team of professionals can provide personalized service to meet your needs. Give us a call at 225-351-2003 or contact us online to learn how we can help assess your property for hurricane damage.

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The Importance of Capital Needs Assessments (CNA) or Property Condition Assessments (PCA) Prior to the Purchase of Commercial Real Estate

Current Market Conditions Continue to Drive Real Estate Pricing

The current pandemic and alarming indications of looming inflation have made a once challenging CRE market treacherous to navigate. With COVID came the mass exodus from office life to telecommuting and working from home. Rising material prices and supply chain disruptions have forced many developers, real estate investors and businesses looking to relocate to settle more and more on the purchase of existing real estate vs. building new properties. 

The mass exodus from office space has created many commercial vacancies nationwide. These vacant properties, with expiring leases, become attractive buying opportunities for suiters lying in wait. That’s the good news for potential buyers. What continues to hamper potential buyers is the rapid rise in list prices for commercial property. 

Understanding What You Are Buying

When budgeting for a potential acquisition and renovation, one must include the purchase price of the existing real estate and all costs associated with the renovation. While less expensive and generally quicker than building new, renovations of existing properties can also create budget challenges. The key to avoiding the challenges associated with renovation is to truly understand the real estate you are purchasing. Without a clear understanding of the existing property, its systems, and its needs, the buyer is sure to find themselves over budget and behind schedule on any potential renovation. 

Power to Make Informed Decisions

Here lies the importance of completing a professionally compiled Capital Needs Assessment (CNA) or Property Condition Assessment (PCA) prior to purchasing existing real estate. Obtaining the building assessment is an essential step in making informed decisions that can greatly affect offer pricing and renovation budgets.  The Building Assessment includes observation and documentation of the property site and grounds, structural systems, building envelope, mechanical systems, electrical systems, interior components and regulatory compliance. 

Based on our thorough assessment, Moran Consultants will opine on the age, condition and remaining useful life of each building component. The Building Assessment will also include Moran Consultants’ professional recommendations for repair or replacement of each building system or element. In addition to documenting the existing condition, the Capital Needs Assessment (CNA) or Property Condition Assessment (PCA) also includes estimates to repair immediate needs, estimates for future maintenance costs, and projected costs to be incurred over the course of the loan term.  

Melissa Warren, CCIM, Senior Advisor at Stirling Properties says “When working with my commercial clients, I impress upon them the importance of obtaining a property inspection from a qualified commercial property inspector who understands the sophisticated systems and reports associated with commercial property. A knowledgeable, well-qualified inspector can identify costly deficiencies, future costs associated with systems approaching the end of useful life, determine if renovations or improvements conducted are up to code and point out potential environmental or life safety issues tied to the building or property that may need further investigations. An inspection is a critical part of the commercial real estate due diligence process and can be used to shape the terms of the deal.”

What’s In It for Me?

Upon completion of the Capital Needs Assessment (CNA) or Property Condition Assessment (PCA), the potential buyer will be equipped with an unveiled, professional opinion of the overall condition, remaining useful life, and cost to repair the existing property. Not only is this information critical for negotiating the purchase price, it is also vital in the development of a complete renovation scope and budget, as well as planning for capital expenditures over the term.

How to Prepare your CRE Deal for Hurricane Season

For coastal regions, the hurricane season can bring considerable risk to a construction project. Based on a report by The Office for Coastal Management, hurricanes have caused roughly $742 billion in damages in the past three years. With the height of hurricane season happening between mid-August and mid-October, it is important to be prepared for peak hurricane season. Having over 50 years of construction experience, as well as extensive expertise in building assessment reporting for hurricane-related damages, we have accumulated a few helpful tips to keep your project prepared and reduce unnecessary risk.

1. Pro-Active Weather Tracking

We are fortunate enough to be able to track storms 3-5 days before landfall and tell the severity of a storm as well as where and when it will hit landfall. It is important to keep track of weather patterns to make sure you are staying up to date. Using a weather app that notifies you of extreme weather can reduce the possibility of last-minute scrambling from your project team. This, in turn, alleviates the possibility of quick clean-ups and faulty equipment storage. Further decreasing undue construction risk. If you are alerted that a hurricane will hit your area, try to have a plan in place 24-48 hours before landfall.

2. Assess Property & Secure Materials

Hurricane-force winds can range from 74 mph – 157 mph. If there is any loose material, this could lead to flying debris that could damage your property or the surrounding area. Have a plan in place to store all loose construction materials such as screws, nails, roofing materials, and lumber. Larger items such as toilets, dumpsters, and flammable tanks should be weighed down and secured. Cranes and other heavy machinery should be lowered and stored properly.

Walking through your site to examine your property for susceptible damage is also important. Bracing roofing material and providing window protection are just a few of the upgrades you can make to reduce potential hurricane damage and the likelihood of damage from wind-driven rain. A great way to ensure that these items won’t be overlooked is to create a Hurricane Response and Hurricane Recovery Team. Check with your general contractor to make sure they have a team in place and are prepared well in advance.

3. Confirm a Hurricane Plan with General Contractor

After the storm has passed, it is time to assess damages and start cleaning up. Make sure your general contractor has a hurricane recovery plan in place and that it is communicated with the project team. Safety being of top priority, establish who will assess damages and make sure they are properly informed of safety guidelines. Having a construction risk management company on your side that can provide a comprehensive building assessment will help you and your project team navigate through hurricane damage and prioritize reconstruction.

There is no doubt that hurricanes have the potential to cause extensive property damage and can de-rail a project timeline quickly. With experience helping projects assess damages after storms such as Hurricane Harvey, Hurricane Ida, Hurricane Sandy, and Hurricane Katrina, our building assessment services can help you manage your construction risk post-hurricane. Call us at 225-351-2003 or contact us online to learn more about our building assessment services. Experience peace of mind knowing that your investment is protected.

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