The old adage "if I only knew then what I know now" definitely holds true for many commercial real estate investors and property owners. Too many owners/investors have bought properties thinking they understand all the problems associated with the property only to have a myriad other issues crop up later.
This situation can be avoided by investing in a facility assessment -- an examination of the physical and functional conditions of a building -- that looks at both current problems and potential future issues a building might have.
"It is important that when you receive the facility assessment report on a building, you understand what it means in regards to the future performance of the building," said Bob Carroll, AIA, principal of Building Analysts, a division of Salerno/Livingston Architects. "Many assessments just look at the here and now. We project future problems that the building may have, giving the potential buyer a clearer picture of the long-term issues they may be facing."
Pietro "Pete" di Girolamo, AIA/CSI of Building Analysts, said, "We want to protect our client's interest. We don't want them to purchase a building not knowing that they will run into difficulties later on."
A facility assessment typically involves surveying the architectural, structural, mechanical, plumbing, electrical and site conditions of the building in question. The assessment addresses all aspects of the facility's physical condition, where it is at in its life span, and whether or not it complies with applicable codes. Building Analysts assembles a team of professionals who specialize in the various aspects of examining a property, including engineers and cost consultants.
"We act as a quarterback for our clients," said Carroll. "We bring together the various professionals to conduct a thorough assessment, we oversee the work, form opinions and alternatives for fixing problems that address short- and long-term needs, determine costs and then communicate back to the client."
At the completion of the facility assessment process, Building Analysts produces a full report about the building.
"The report details the pros and cons of the building, which is a great tool for the buyer when they decide whether or not to purchase the property and if it is the best investment for their money," said Carroll. "Too often properties become money drains when future problems are not addressed in an assessment. We try to ensure that our clients are fully informed so that the investment will prove to be a good one."
Building Analysts can vary the format the report to suit the specific needs of the client. Most reports contain documentation review and interviews with building occupants, governmental agencies, operators and other stakeholders; a walk through survey of the observable conditions; preparation of opinions of probable cost; and a property condition report.
Building Analyst's parent company, Salerno/Livingston, is often utilized by clients to oversee the implementation of the recommendations made in the assessment. Salerno/Livingston provides a variety of services that can be utilized in the improvement process from design development through construction administration.
Building Analysts' assessments give buyers information that will help them in all aspects of purchasing a property. According to di Girolamo, "Our evaluation is one of the best tools a buyer can use when negotiating the price of the building, as it provides a basis for a well informed offer. For example, to our trained eye, telltale wear and staining patterns often are subtle indications of a developing maintenance or replacement need. The costs to fix the problem can then be calculated before making the offer."
With nearly 30 years of architectural experience, di Girolamo has developed an expertise in investigating and evaluating buildings for commercial and residential clients throughout the southwestern region. He has performed many facility assessments, especially for investors looking to purchase condominium conversion projects.
"The condominium investment market is an area where an assessment can be of great benefit," said di Girolamo. "Many apartment buildings were converted into condos without much thought. As a result, there are many problems either because they are older and worn down, or simply because something cracked or broke and was never fixed before it was converted, or it wasn't fixed properly. On the other hand, some conscientious converters use assessment information to insure sufficient repair or disclosure in the conversion process."
Since 1980, Building Analysts has conducted hundreds of facility assessments for buildings ranging in size from a few thousand square feet to well over 100,000 square feet for public and private sector clients across the country. Fees are based on time and material and can range greatly depending on the size and complexity of the project under consideration.
In addition to facility assessments, Building Analysts also offers architectural services, peer review services and litigation support services. The firm has been designated experts on both plaintiff and defense matters, as well as court-appointed neutral experts, testifying at trial on numerous cases.
Even though Building Analysts provides litigation-related services, the principals agree that making clients fully informed about the current and potential future problems with a property is one of the best ways to stay out of court. "By dealing with problems now, our clients can avoid hassles and heartaches in the future," Carroll said. "We are glad we can help with that."
Kovach is a senior account manager with TW2 Marketing.