When individuals are interested in purchasing commercial real estate, a commercial property condition assessment (PCA) is necessary to evaluate the current condition of the property. Many structural engineers use the ASTM 2018 Standard to assess commercial properties. A property assessment for commercial buildings can also be used to assure lenders that prospective buyers will be able to properly maintain the building and pay off their loan with their current cash flow. These extremely detailed reports must be completed by trained professionals to ensure the validity of the report.
ASTM 2018 Standard Objectives
The ASTM 2018 Standard is used to assess the general condition of a building site and other improvements needed at a specified location. The property condition report (PCR) will identify any areas which require repair and assign them an estimated cost so can get a general idea of the work that needs to be done to your structure. This standard for method of completing and reporting property condition assessments makes it easier for engineers to provide you with a complete, detailed, and thorough report of your structure by:
- Defining good commercial and customary practice for the PCA of primary commercial real estate improvements
- Facilitating consistent and pertinent content in PCRs
- Developing practical and reasonable recommendations and expectations for site observations, document reviews, and research associated with conducting PCAs and preparing PCRs
- Establishing reasonable expectations for PCRs
- Assisting in developing an industry baseline standard of care for appropriate observations and research
- Recommending protocols for consultants for communicating observations, opinions, and recommendations in a manner meaningful to the user
What Does It Look For?
When you request property condition reports, a structural engineer will evaluate the building and all of its systems to determine their condition. During the commercial property condition assessment, they will look at the following elements of the structure:
- Overall Structure
- Building Site and Envelope
- HVAC System
- Interior Elements
- Vertical Transportation (Elevators, etc.)
- Site drainage
This evaluation consists of both an onsite inspection and a data analysis. All of this information is then compiled into an overall report that is provided to the requestor.
How Is It Used?
There are two primary ways these detailed reports can be used in the commercial building industry. First and foremost, prospective buyers use property condition reports in much the same way home buyers use home inspections. The information within the report can be used to set a price for the property or to negotiate for repairs to be made before the sale is finalized.
On the other side, banks and other lenders can use a property assessment for commercial buildings to determine whether a prospective buyer can afford the payments and all of the maintenance the property and its systems may require over the life of the loan. Not only does it provide insight into the ability to pay the loan, but it also lets them know more about the condition of the building and the value it will hold if the buyer does default on the loan.
A Relatively New Process
A property condition assessment for commercial properties has only been in place since the early 1990s. Since this time, the process and requirements have evolved to create a system that protects both the buyer and the lender in the lucrative commercial industry. Since 2000, these reports have become required for the sale of any commercial property to be completed.
A commercial property condition assessment is a valuable way to determine whether a commercial property is worth investing in. These property condition reports offer extensive detail on the condition of the building itself, as well as all of the critical systems, including HVAC, electrical, plumbing and more. This can provide buyers with insight into the actual value of the building and tells lenders whether it’s worth the risk.
If you’re interested in getting a property assessment for commercial buildings, contact us. Our structural engineers can provide the services you need to make an informed decision.