Property Condition Assessments & Reports
The purpose of a Property Condition Assessment (PCA) is to observe and report on the physical condition of the subject property and to provide professional recommendations regarding future issues, including financial risk or liability to the client. We perform Property Condition Assessments and Property Condition Reports (PCR) for lenders and real estate investors. During the Property Condition Assessment, our architects, engineers, and building inspectors assess the subject property in order to understand the condition of the building. A formal Property Condition Report is then generated discussing each building system, pictures and its current condition.
The most important parts of the Property Condition Assessment and Report are the Immediate Repairs Table and Replacement Reserve Table. These details in costs (or a CNA: Capital Needs Assessment) enable the client to fully understand how the condition of the building will impact the asset's Financial Performance.
Phase I PCA Scope
Commercial Mortgage Backed Security lenders, Insurance lenders, and Portfolio lenders routinely order Property Condition Assessments (PCA), also known as Property Condition Reports (PCR) or Commercial Building Inspections. We prepare PCAs to meet the requirements of rating agencies such as Standard and Poor's, as well as to the scope of work defined by ASTM International, E2018-15 Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process.
Our reports discuss all major building systems and site improvements, plus they include an Immediate Repairs Table and Replacement Reserve Table. The Immediate Repairs Table identifies capital needs (Capital Needs Assessment or CNA) and prices for all failing or damaged building systems and life safety issues.
Equity PCAs
Real Estate Investors are interested in ensuring that their investment is indeed a solid one, with No surprises. We customize our Property Condition Assessments to the asset and the investor's concerns. We can ensure very comprehensive building assessments where all major systems are tested and evaluated.
While more comprehensive assessments are generally more expensive, we often save our clients money well in excess of our fee, by identifying major building deficiencies, prior to our client taking ownership. We also offer a “Limited” PCA for partial developments.
Please Note: While our assessors are very knowledgeable, our assessments can be enhanced by our network of specialists. We maintain relationships with expert specialists in every building system. If requested, the Specialist Reports can then be added into your custom Property Condition Report, for focused review - analysis.
Phase I Environmental Site Assessments
A Phase I Environmental Site Assessment is the gold standard for evaluating the environmental liability associated with a real estate asset. Any investor can rest assured with our implementation of the ASTM E1527-13/ 21 Standard. Our Phase I Environmental Site Assessments are done by Environmental Professionals who meet the requirements of the EPA's AAI ("All Appropriate Inquiries") Standard. We offer our clients an expert perspective on every property type to be considered.
A Phase I Environmental Site Assessment is the gold standard for evaluating the environmental liability associated with a real estate asset. Any investor can rest assured with our implementation of the ASTM E1527-13/ 21 Standard. Our Phase I Environmental Site Assessments are done by Environmental Professionals who meet the requirements of the EPA's AAI ("All Appropriate Inquiries") Standard. We offer our clients an expert perspective on every property type to be considered.
"All Appropriate Inquiries" Rule The EPA's All Appropriate Inquiries Rule governing the scope of Phase I Environmental Site Assessments went into effect on November 1, 2006 and provided specific scope requirements for a Phase I ESA to meet the requirements of CERCLA's innocent land owner defense. In our environmental risk execution, we help buyers meet the legal requirements for the CERCLA innocent landowner defense and we provide practical business advice on environmental liability to our clients. |
ASTM E1527-13 Standard Update
In February, 2022, ASTM published the new standard for conducting Phase I Environmental Site Assessments, ASTM E1527-13/ 21. ASTM E1527-13/ 21 has replaced the E1527-05 standard as the industry best practice for Phase I ESAs. The changes from the 2005 to 2013/ 21 ASTM standards do not significantly alter the Phase I Environmental Site Assessment report or process, but there are a few key changes any investor should be aware of.
The most significant changes to note include:
File Reviews - The E1527-13/ 21 standard imposes a stronger imperative for conducting regulatory file reviews. The environmental professional reserves the right to possibly waive such a review, but must explicitly explain in the report why a review is not justified.
Vapor Migration - E1527-13/ 21 places more emphasis on assessing impacts to the subject property from vapor migration. This is done through several changes in the standard: 1) Clarifying that the definition of a release does include contamination in the soil vapor phase, not just in soil or groundwater; 2) Adding a definition of “migration” that includes vapor (as well as soil and groundwater); and 3) illustrate that vapor migration/ intrusion does not fall under the category of an Indoor Air Quality concern (which is out of the ASTM 1527 scope of work).
Definitions - Several definitions have been clarified and simplified, and a new definition has been added of a “Controlled Recognized Environmental Condition” or “CREC.” You will now see CREC as an additional section being discussed in the executive findings and conclusions of our reports.
Phase I ESA Scope
Site Visit
- Inspection of the Site by an Environmental Professional
- Detailed Pictures Log
- Catalog the Presence of Hazardous Materials or Petroleum Products
Limited Environmental Due Diligence Reports
Not all situations require a full Phase I Environmental Site Assessment. Sometimes the client is not required to qualify for CERCLA liability protection, such as many Financial Lenders conducting environmental due diligence for Loan originations. In these cases, a tiered environmental due diligence policy, utilizing both the Phase I and Limited-scope or "Desktop" environmental reports, can be successful at screening for high environmental risk properties. We will fulfill the proper level of your specific needs-solutions.
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