Why Building Condition Assessments Are Important in CRE
An essential step toward making informed decisions.
2 min read
You must consider many things when investing in commercial real estate—and getting a building condition assessment should be one of them. As part of your due diligence, a building condition assessment will help you determine whether the property is the right fit for you. If this is your first time purchasing a commercial real estate property, you may wonder-- what is a building condition assessment, and why is it important?
A building condition assessment is a formal inspection, review, and report on the state of a commercial property's external and internal structural components. The evaluation will indicate the short term and long term needs of the building associated with;
The site and grounds: pavement, curbs, loading docks, walks, landscaping, irrigation, site drainage, exterior lighting, walls, fencing/railings, signage and external amenities
Structural systems: foundations and structural framing of walls, columns, intermediate floors and roofs
Building envelope: roofing systems, exterior finishes, stairs and steps, exterior doors and windows
Mechanical systems: electrical, heating, ventilation, air conditioning, plumbing and conveyance systems
Interior building components: interior finishes of common areas and tenant areas
Regulatory compliance: life safety and fire suppression systems
Assessors document each of the above components, review the maintenance and repair history of the building, and interview applicable staff. The final report will reveal what needs repair or replacement to meet industry standards. The lifespan of the elements is stated, with recommendations for repairs or replacements and their associated costs stated.
A building condition assessment will ensure you are well informed of the state of the property you are considering investing in and can be used during the negotiation process with the seller.
Reference
Building condition assessments – what you need to know. BDC.ca. (2022, May 5). Retrieved May 17, 2022, from https://www.bdc.ca/en/articles-tools/money-finance/buy-lease-commercial-real-estate/why-do-i-need-building-condition-assessment
What is a building condition assessment and when do you need one? GLE Associates, Inc. (2019, May 8). Retrieved May 17, 2022, from https://www.gleassociates.com/what-is-building-condition-assessment/
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