Property Condition Assessments are used by lenders, borrowers, owners, and investors to evaluate an asset’s conditions and estimated useful life of various components, often for the purpose of a property acquisition or refinancing.
WHAT IS A PROPERTY CONDITION ASSESSMENT?
A Property Condition Assessment (PCA), which results in a Property Condition Report (PCR), is the visual assessment of a building’s condition. PCAs are generally ordered by the lender in real estate transactions, but there are more comprehensive variations of the report specific to buyer and owner needs.
Property Condition Assessments are also commonly known as Property Assessment Reports or Property Condition Assessment Reports, and are generally written to the ASTM 2018-15 standard unless a more in-depth scope is requested by the client.
WHO NEEDS A PROPERTY CONDITION REPORT?
PCAs are most often ordered by the lender during a property transaction to understand the risk profile of the asset, but any stakeholders in a property or portfolio may find use in the data provided, including:
- Facility Managers
WHY DO I NEED A PROPERTY CONDITION ASSESSMENT?
If you’re acquiring an asset, you already know the vast majority of lenders require property due diligence before approving commercial loans. In addition, proper due diligence is a stakeholder’s greatest weapon for reducing delays and eliminating surprises that often derail a deal.
Some of our clients work within rapid turnaround times, while others have more time to make their decisions. But one thing they all share is the desire to avoid obstacles and address potential issues up front.
You need a Property Condition Assessment for any property in which you are a stakeholder for the peace of mind that comes with a comprehensive understanding of the possibilities, obstacles, and costs associated with lending on, or purchasing a new property.
The value of the information you gain can lead to spending much less on a deal, or avoiding a property that has major issues. The peace of mind and informed decision making that results from a PCA outweighs the cost of the assessment – spending pennies to save dollars in the long run.
ASTM STANDARD PCA
An entry-level Property Condition Assessment meets the basic standards set by ASTM E2018-15 Standard Guide for Property Condition Assessments. It’s typically ordered by loan officers to satisfy their institutions’ due diligence requirements for approving commercial loans.
The typical scope requires a building generalist to perform a visual inspection of the property and provide a report with general documentation of the inspection.
WHY SHOULD I CHOOSE EBI CONSULTING OVER OTHER COMMERCIAL REAL ESTATE DUE DILIGENCE COMPANIES?
Due diligence is a highly competitive environment and some consultants cut corners; as such, not all Property Condition Assessments are created equal. At EBI Consulting, we know every transaction is important and unique, which is why we work to first understand your needs and ideal outcomes.
A Property Condition Assessment completed by EBI will deliver:
- Actionable information to help you make the best investment decisions and negotiations
- Customized solutions that are relevant and unique to your property
- A dedicated team of senior staff specialists collaborating to meet your goals and needs
Property Condition Assessments are a critical step in understanding costs, risks, and opportunities related to a real estate transaction. Need real life examples of the benefit of working with EBI on your property condition due diligence? Understand how our comprehensive reporting impacts your project’s bottom line with our popular white paper, Advantages of a Higher Due Diligence Standard.
Our nationwide network of local experts is ready to serve as knowledgeable, trusted partners through every phase of your real estate investments, whether your standard Property Condition Report suffices for a particular deal, or you need senior staff specialists who can customize your property analysis.