Category: Historic Tax Credit

When entering a financial transaction to purchase or sell a property, it is important to have a clear picture of the overall physical condition and a review of the existing due diligence documentation. This provides protection for both the buyer and the seller. A property condition assessment (PCA) is a great way to ensure you have a clear understanding of the asset prior to closing. Also referred to as a commercial building assessment (CBA) or capital needs assessment (CNA), a property condition assessment offers a neutral, third-party, high-level overview of the building’s structure, systems, fixtures, and finishes. The PCA will identify deficiencies that require immediate correction, such as life/safety issues or major code violations; and short-term repairs that will ultimately require corrections in order to maintain the safety and stability of the property. PCAs can also include a Replacement Reserve table that will evaluate various aspects of the property, identify the remaining useful life, and calculate a cost replacement total for expenses that may occur during the term of the loan.

How Can a Property Condition Assessment Benefit Your Individual Needs?

Owners – A property condition assessment can provide important details regarding your property for strategic planning, including future capital improvement projects. A PCA can also be utilized after a natural disaster as a supplemental document as part of an insurance claim.

Buyers – Assessing the condition of a property prior to purchase is a huge resource for any potential buyer. A property condition assessment can help identify potential risks that may affect a property’s value, help in the development of a renovation plan, and assist in the budgeting of future capital expenditures. Within an assessment, a buyer may also discover the lack of a regular routine maintenance program, further identifying potential property value risks.

Lenders – Most financial lenders require a property condition assessment as part of the due diligence documentation during the loan process. An assessment allows a lender to identify potential issues that could affect the property’s overall value as well as uncover a potential lack of deferred maintenance from the previous owner. This allows the lender to have a clear picture of the overall condition of a property and assist with financial decisions.

Whether you are an owner, buyer, or lender, receiving a property condition assessment is a great way to ensure proper due diligence. Moran Construction Consultants’ 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, Florida Housing Finance Corporation (FHFC), 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 225-351-2003 or contact us online to see how we can help you make an informed decision before making a critical investment.

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Increase Demand for Historic Tax Credits

Since 1977, the HTC Program has provided a sought-after tax incentive for those in the real estate development industry. While demand for historic tax credits (HTC) has fluctuated through the years, preliminary certifications for rehabilitation (Part 2 Approval) have steadily increased in the long term. According to the National Park Service (NPS) report on tax incentives, the number of Part 2 Application Approvals increased by 23%: 1,045 in 2007 to 1,282 in 2020. Contributing to such an increase, unforeseen economic downturns (i.e., COVID-19) encourage Developers, Contractors, and Architects to diversify their project portfolio and/or seek the capital benefit of historic tax credits. Going through the approval process may seem daunting, but, with a construction consulting company such as Moran Consultants on your side, we can help manage specific construction-related requirements of the HTC Program.

Figure 1 Federal Tax Incentive for Rehabilitating Historic Building, retrieved from NPS. https://www.nps.gov/tps/tax-incentives/taxdocs/tax-incentives-2020annual.pdf.

The Potential Risk to Your Project During the HTC Application Process

With the DOI’s (Department of the Interior, NPS) nuanced standards for rehabilitation, and the inherent challenges with any construction project, communication gaps can often arise regarding the specific NPS construction requirements. Moreover, once the Part 2 Application is approved and work begins, the ongoing compliance to these construction standards is not typically reevaluated until the completion of the project and the preparation of Part 3. In the event a scope item is deemed (by the NPS) to “not meet the standard,” the potential cost and time impacts may significantly affect the successful completion of the project and investment risk of involved financial parties.

How Moran Consultants Can Help

Moran Consultants has conducted upfront due diligence reviews and/or construction loan monitoring of 100+ HTC projects across the nation. We review the NPS scope items during pre-construction and throughout construction itself, reporting on adherence of the work to the Department of the Interior’s Standards for Rehabilitation. Additionally, we are actively working alongside many of the nation’s prominent Historic Preservation Consultants, such as Heritage Consulting Group, to ensure timely resolution of any scope-related issues as soon as they arise. If you need help managing risk on your next HTC project, give us a call at 866-545-3350 or contact us online to learn how Moran Consultants can help.

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Before investing in a project, it’s crucial to have a strong understanding of what to expect once the work begins. Some investors may not spend the appropriate amount of time or resources on this step. But the consequences for rushing through the process can be severe. Potential red flags that signal increased risk may not be noticed until it’s too late. From there, the investor may be responsible for expensive repairs and adjustments which may have otherwise been avoided. This is what makes the duty of a property condition assessment company in Louisiana so important. It can mean the difference between a successful endeavor and a costly one. 

If you are searching for property condition assessment services you can rely on, Moran Consultants is ready to assist you. Learn how these services may save investors from expensive mistakes. And discover the steps involved in the process and how they can safeguard your investment.

What’s Involved in a Property Condition Assessment?

A property condition assessment is an in-depth visual inspection of a building that can help determine the status of the property as well as its systems and needs. For potential investors who may be budgeting to acquire this property, the information gained from a property condition report can help in determining the appropriate budget. This thorough process includes an inspection of several key areas related to the property and its systems, such as:

• The site itself
• The structural framing and building envelope
• Facades
• Interior elements
• Roofing
• Vertical transportation
• Electrical systems
• Plumbing
• Code compliance, ADA compliance, fire protection, and others.

Following the inspection, a property condition report can detail issues that could impact the property’s potential as an investment. For example, if the property condition report shows serious foundation issues, this will inevitably impact the value of the property. It may lead to negotiations that either include costly repairs or a reduced price that factors in the need for repairs.

Who Can Benefit From a Property Condition Assessment?

Investors, lenders, and insurers often require property condition assessments to identify potential property issues and determine the property’s current value with an enhanced level of accuracy. However, a property condition assessment can also help buyers negotiate a lower offering price if the property condition report shows areas of concern.

Are You Searching for a Reliable Property Assessment Company?

When you need the services of a reliable property assessment company with a strong reputation, choose Moran Consultants. As a licensed and insured construction company with more than 50 years of industry experience, our consultants can help you make an informed decision before making a critical investment. Call us today at 866-545-3350 or contact us online to begin the process. Helping you make the best decision about your investment is our priority.

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Founded in 1789, North Carolina is one of the oldest states in the country. Given their rich history, there are a plethora of historic buildings, structures, and sites being put on the National Register of Historic Places. Of the approximately 2,900 total listings in North Carolina, about 540 are historic districts, some of which contain hundreds of contributing historic buildings or sites. According to North Carolina’s Historic Preservation Office, “From 1976 through December of 2014, 1,398 National Register properties in North Carolina were rehabilitated under state and federal historic preservation income-producing tax incentive programs, representing an investment of over $1.69 billion in National Register properties in the state.” This investment is not stopping anytime soon with North Carolina Governor, Roy Cooper, extending the state’s Historic Tax Credits to January 1, 2030. This ensures that developers, investors, and preservationists will be able to utilize this tax incentive through the end of the decade. With all the historic tax credit incentives in the North Carolina market, it is more important than ever to utilize these tax credits and manage your construction risk to save you time and money.

Historic Tax Credits Application

As discussed in our blog, ‘The Demand for Historic Tax Credits (HTC) and The Intricacies of HTC Projects’, Historic Tax Credits are tax incentives offered by the local and federal governments to help finance the rehabilitation of historic buildings. To be able to qualify for these tax credits you must meet certain requirements and go through an application process. Broken into 3 parts, the application and approval process may seem daunting, but with a construction consulting company such as Moran Construction Consultants on your side, we can help manage specific construction-related requirements of the HTC Program.

 

How Moran Construction Consultants Can Help

Moran Construction Consultants has conducted upfront due diligence reviews and/or construction loan monitoring of 100+ HTC projects across the nation. We review the NPS scope items during pre-construction and throughout construction itself, reporting on adherence of the work to the Department of the Interior’s Standards for Rehabilitation. Additionally, we are actively working alongside many of the nation’s prominent Historic Preservation Consultants, such as Heritage Consulting Group, to ensure timely resolution of any scope-related issues as soon as they arise. If you need help managing risk on your next HTC project, give us a call at 225-351-2003 or contact us online to learn how Moran Construction Consultants can help.

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Whether you are a lender, syndicator, or investor, it is important to pay attention to factors that may be outside of your main areas of risk. Having a plan in place for construction risk management can add value to your project and protect you from unforeseen risks. At Moran Construction Consultants, we use our 50-plus years of construction experience to offer an in-depth construction consulting service inclusive of up-front reviews, monthly construction loan monitoring, property condition assessments, phase I environmental site assessments, and more. Let’s take a look at some reasons why hiring a construction consultant for your next job can help you save time and money.

What Makes Hiring a Construction Consultant a Worthwhile Investment?

A construction consultant plays a pivotal role within the construction industry. They possess a deep understanding of the construction process, from planning and design to execution and completion. Their core competencies include anticipating potential issues, recommending cost-effective solutions, ensuring compliance with regulations, and managing project timelines. They serve as a valuable ally, helping clients navigate the complex world of construction.

3 Benefits Construction Consultants Can Bring to Projects

With the high costs associated with construction projects, it pays to have a knowledgeable industry professional looking out for your investment. Learn about the crucial services a construction consultant can provide.

1. Quality Assurance

Although we hope for high-quality work, too often we see extensive delays and legal disputes arise among construction parties. This, in turn, leads to time and costs for all parties involved. It is important to make sure the project has a qualified team, including an experienced architect and General Contractor, both with expertise in projects of similar size and scope. This will aid in producing quality workmanship and documentation in addition to a more smoothly run project. 

By hiring a third-party construction consultant, you can rest assured that you have someone carefully monitoring your project at each phase of construction. If an issue does arise, our consultants will address the situation immediately and notify you so that appropriate action can be taken.

2. Cost & Time Risk Mitigation

One of the most important factors in any deal is making sure the project will be constructed on time and within budget. All construction projects can be impacted by unexpected change orders and other financial constraints. This has been even more exacerbated with today’s current market. Increased material costs, delays, and shortages have made the ordering of construction materials somewhat unknown but planning with an experienced construction consultant can help you steer clear of major delays.

3. Industry Knowledge

The largest benefit of having a construction consultant on your side is the access you gain to valuable industry knowledge. Monitoring construction sites across the country has given our company the unique perspective of seeing key elements that make a project successful. For the duration of the project, your designated consultant will be available to answer questions and provide insight. In addition, they will provide you with a detailed report on the state of the project.

The Value of Hiring a Construction Consultant

In the complex world of construction, a skilled consultant serves as a guiding light throughout the project, illuminating the path to successful completion. They bring unmatched expertise, take a proactive approach, and commit to delivering excellence. With Moran Construction Consultants on your side, you can rest assured knowing your project is in expert hands. 

Partner With Moran Construction Consultants

Moran Construction Consultants has long-standing expertise in assisting lenders, syndicators, and investors in mitigating risks associated with construction. Our 50 years of industry experience have afforded us an incredible range of projects priced from several hundred thousand dollars to several hundred million dollars and within diverse sectors, including:

• High-rise 
• Retail 
• Office 
• Entertainment 
• Education 
• Multi-family apartments 
• Residential homes

With projects across the country, we have a unique perspective on national and local market trends based on our extensive database of project information, allowing us to make accurate and timely comparisons. Our dedicated and responsive team consistently meets national customer demands, with local market knowledge. 

If you would like to safeguard your investment on your next project, we’re ready to help. Call 866-545-3350 or contact us online to learn more about our services.

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As part of our complete line of services for lenders, syndicators, and investors, Moran Construction Consultants offers Property Condition Assessments (PCA). Also referred to as a Capital Needs Assessment (CNA) or Commercial Building Assessment (CBA), this report offers a high-level understanding of the condition of a building or facility. During our assessment, one of our experienced, in-house consultants will evaluate the building systems and classify them on a good, fair, or poor rating. They will also identify any immediate cost repairs and/or short-term repairs that would require attention within the first 12 months. Our team can also provide a replacement reserve table that can be calculated on a 7-year, 10-year, 12-year, or 15-year term.

Why Choose A PCA From Moran Construction Consultants?

Investors, lenders, and insurers often require Property Condition Assessments to identify potential property issues and determine the property’s current value with an enhanced level of accuracy. However, a Property Condition Assessment can also help buyers negotiate a lower offering price if the assessment shows areas of concern. Due to its importance, you want to make sure you are getting a comprehensive report laying out all building details and potential risks. Moran Construction Consultants’ 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. Meeting the requirements to perform a PCA for Freddie Mac / Fannie Mae, a report for these properties can be made as well. No matter what your needs may be, our company strives to create a personalized service that is hand-crafted to meet your standards. Below you can find a list of what is included in one of our Property Condition Assessments.

Moran Construction Consultants’ PCA Scope of Work:

• Visual Observation of the Site
• Interviews with On-Site Staff
• Building Department and Fire Marshal’s Report Records Search
• Evaluation of Building Systems
  • Mechanical, Electrical, Plumbing
  • Vertical Transportation (Elevators, Staircases)
• Building Evaluation
  • Structural
  • Foundation
  • Roof
  • Interior Finishes
  • Building Envelope
• Site / Civil Improvements Evaluation
  • Site Elements
  • Utilities
• ADA Compliance Evaluation
• Multi-Family Federal Fair Housing Act Compliance Evaluation
• Environmental Risks

 

With over 50 years of industry experience, our consultants can help you make an informed decision before making a critical investment. Not only is the information gained from a Property Condition Assessment critical for negotiating the purchase price, but it is also vital in the development of a complete renovation scope and budget, as well as planning for capital expenditures over the term. You can learn more about the importance of acquiring a Property Condition Assessment in our blog ‘The Importance of Capital Needs Assessments (CNA) or Property Condition Assessments (PCA) Prior to the Purchase of Commercial Real Estate’. Call us today at 225-351-2003 or contact us online to begin the process and see how Moran Construction Consultants can help you make an informed decision on your investment.

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When it comes to running a project that is completed on time and within budget, proper documentation and efficient construction management are key. It is not uncommon for a project to go over budget. While this is sometimes caused by a lack of foresight in the budgeting and planning stage, there is a multitude of factors that can cause a project to incur cost overruns throughout the construction process. With over 50 years of construction management experience, we have listed 3 common reasons for a project to go over budget.

Unforeseen Conditions

Unforeseen conditions are factors that are not identified at the beginning of the project. Without proper construction management, these unexpected situations can impact a project quickly and lead to unanticipated costs. For new construction, unforeseen conditions can be the discovery of poor soil or rock removal. For pre-existing structures, this could be the finding of hazardous materials or structural wood rot. Most projects will experience some level of unforeseen conditions. Proper due diligence prior to receiving the final construction documents can help alleviate cost overruns. Having adequate contingency allocated for unforeseen conditions or overages is also a great way to mitigate unexpected costs from unforeseen conditions.

Outdated Pricing

Outdated pricing can occur when there are delays between the bid date and the actual start date of a project. During this time, materials and labor costs may increase in price, making the original contract price inaccurate. Outdated estimates on a project’s budget are one of the most common reasons for cost overruns. One way some project teams ensure accurate pricing is by having purchase orders and subcontractors signed within 90 days of executing the prime contract. A team may also define a material escalation limit in their contract to ensure cost overruns are manageable if a delayed start date does occur.

Supply Chain Issues / Un-Timely Procurement

Over the past 3 years, project teams have had to adapt to a supply chain riddled with delays and shortages. It is important to anticipate these issues, so unexpected costs and delays aren’t exacerbated later. If materials are not ordered in a timely manner, a project team may run into extended lead times leaving no choice but to pay a higher price for available materials or delay project development. Proactive procurement is the best way to mitigate this potential cost overrun. Early buyout of subcontractors and constant communication with subs and vendors will assist in mitigating these potential issues.

Cost overruns can be a nightmare situation for every party involved. While some of the reasons for these setbacks are unavoidable, some are attributed to inadequate planning or lack of experience. At Moran Construction Consultants, our team of professionals has 250 years of combined construction management experience. From outstanding projects to poorly executed ones, we have seen the planning and oversight required to run a successful project. Working alongside the project team throughout the construction process, we are able to recognize and mitigate potential cost overruns. Give us a call at 225-351-2003 or contact us online to learn how we can help safeguard your investment.

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