PROPERTY CONDITION ASSESSMENTS & TURNOVER REPORTS
How well you understand your property is one of the critical elements of financial success during commercial acquisitions or turnovers between developers and owners. We can help make sure you know as much about the physical condition of your property as the seller, developer, or turnover inspector.
COMMERCIAL PROPERTY CONDITION ASSESSMENTS (PCA’S)
Mistakes during the due diligence period can result in costly property modifications or repairs that can significantly impact or eliminate the financial success of your investment.
At MHA, our staff not only has significant experience completing Property Condition Assessments (PCAs), we also have significant experience with evaluating construction-related deficiencies and failures. This gives us a unique perspective as we evaluate a commercial property – in essence, we can identify many problems before they are readily evident to others. This additional insight allows us to create realistic cost opinions to remedy physical deficiencies– a critical element of making a sound real estate investment. For us, each property is different; therefore, each PCA is different.
We can provide a team to evaluate the following:
- Building Structure: Foundation and Main Load-Carrying Components
- Building Envelope: Roof, Walls, Windows and Doors
- Building Systems: Mechanical (HVAC), Electrical and Plumbing
- Life Safety: Emergency Egress and Fire Suppression Systems
- Site Improvements: Pavements, Drainage, Landscaping, Lighting and Hardscape Elements
- Americans with Disabilities Act Compliance
- Building Interiors
- Public Records Review: Zoning, Taxes, Flood Insurance Rate Mapping and Fire Code Violations
OUR PROCESS
We typically start our evaluations with a visual walk-through of the property, followed by a conversation with you to discuss what we observed. This is important because you get initial reactions quickly during the assessment process, which may help temper your ongoing negotiations. In most cases, that’s all that is required before we create a report and develop the cost opinion. If, however, significant deficiencies are observed that warrant additional investigation or a change in plans, we will work with you to help you understand the issues and determine the next step.
TURNOVERS
When a developer turns over the management of a property to an owner’s association, a turnover report is typically required. At MHA we understand the sensitivity of these reports from both perspectives.
As an owner, you want to make sure your property was constructed well and you received what you paid for. As a developer/contractor, you take pride in your work and want to close out the project so the new owners are happy, furthering your reputation.
We have been involved with turnover studies from both perspectives – working for the owner’s association or for the developer/contractor. In both cases, we know that the success of a turnover requires a company that understands the plans, understands the building code, can grasp changes that may have occurred during construction, and can identify real issues.
The danger in this process, for both parties, is when turnover reports are wrong. From either perspective, having a report that inaccurately identifies issues can draw out a time-consuming process and complicate your ability to resolve any real issues.
Our value to owner’s associations lies with our ability to:
- Identify construction deficiencies – especially those that have not resulted in observable damage yet
- Explain the issues and their potential impacts (i.e, life safety issue or an issue that will result in a reduced lifespan of a building element)
- Develop reasonable repair solutions for developer/contractor assisted repairs
- Life Safety: Emergency Egress and Fire Suppression Systems
- Develop accurate cost opinions for owner-driven repairs and planning
- Help the owners utilize the information from the turnover study to prioritize issues
We have also assisted developers by evaluating turnover reports and completing independent evaluations that allow us to:
- Correct misinterpretations of the building code
- Confirm acceptable modifications during construction
- Confirm real issues that should be addressed
- Develop reasonable repair solutions