Property Condition Assessment: A Property Management Tool
By Richard Timm, II, P.E. of Raba-Kistner Consultants, Inc.

Return to the Knowledge Base

Property Condition Assessments (PCA’s) have traditionally been used as part of the due diligence process during transfer of real estate assets. Today’s real estate owners and managers are using this detailed assessment as a management tool for maintenance and capital improvement planning. A properly prepared PCA typically provides an evaluation of all building systems and a Capital Reserve Analysis for terms of five years, ten years and even twenty years. This analysis may provide the projected capital improvement dollars by system and by year required to maintain the real estate asset to maximize its usable life.

To bring some structure and uniformity to this process, standards have been devised and systems and procedures have been adopted for performing PCA’s. The American Society of Testing and Materials (ASTM), an independent organization founded in 1898, has developed standards and procedures including the original standard, ASTM E2018-99, which was amended in March of 2002 with ASTM E2018-01 that brings focus to seismic issues and implication of the Americans with Disability Act (ADA) for building owners.

When you hire an organization to perform a PCA, you can have them focus on the components of the ASTM standard or they can customize the scope of services to cover special concerns associated with your location. Owners and managers always need to keep aware of the possibility of new risks and changing regulatory requirements. Most PCA’s will examine the property from a variety of building systems including:

  • Preliminary property management interview and walk-through,
  • The building’s construction including number of floors, square footage, adjacent buildings and age and major additions/renovations,
  • Site concerns like landscape, lighting, sidewalks, fences, drainage, parking, pavement and access,
  • Building evaluation including roof condition, structural systems, foundation systems, and exterior curtain wall,
  • Life safety, fire protection and sprinkler systems,
  • Floors, interiors, roofs, walls, windows, waterproofing, stairs and doors,
  • Elevators and escalators,
  • HVAC, plumbing, electrical, telephone, security, fire and safety systems,
  • Code and ADA compliance issues, and
  • Interviews with contractor’s service.
Drawing on the expertise of architects, engineers, construction and maintenance experts, the PCA helps evaluate each system and its current condition.

The survey will begin with a preliminary review of available and relevant drawings, specifications, reports and records and brief interviews with the owner, the property manager and/or maintenance personnel. Following the preliminary data reviews and interviews, the PCA professional will conduct a “walk-through” of the property for the purpose of observing the general condition of the property to locate problems and visible defects in the material and building systems.

The site assessment portion should address parking, lighting, landscaping, drainage, pavement, sidewalks, fencing and retaining walls. An assessment will comment on surrounding areas that have possibly caused changes to the principal property and/or proposed new developments that could affect the property. A check should be made with the Federal Emergency Management Agency (FEMA) to determine the flood plane status of the property.

The evaluation of the building envelope will address the foundation, the structure in general, the roof and exterior wall system condition. The types of systems will be identified and their current condition and expected remaining life noted. Problems and visible defects will be documented and opinion of cost for necessary immediate and scheduled repairs noted.

The interior assessment will include the interior finishes in the common areas and tenant areas such as carpeting and tile floor coverings, painted or wall paper coverings on walls, and gypsum board, or mineral tile suspended ceilings. Typically, the assessment does not include determining sound transmission ratings or flammability ratings.

The mechanical evaluation will address the building’s Heating, Ventilation, and Air Conditioning (HVAC) systems. Material components of the mechanical systems include water chillers, cooling towers, packaged equipment, boilers, pumps, fans, ductwork, exhaust systems and controls.

The electrical portion of the assessment evaluates the primary electrical distribution system. Material components include main distribution panels, transformers, conductors, emergency generators and lighting.

The plumbing assessment will cover the primary plumbing piping, equipment system and fixtures. Material components include sanitary, storm and domestic water piping, pumps, lift stations, and fixtures.

The life safety/fire portion will assess the fire protection water sprinklers, standpipes, smoke/heat detectors, smoke evacuation fans, audible/visual alarms, and main fire alarm control panels. The assessment typically does not include determining NFPA hazard classifications or classifying assembly ratings.

The ADA Compliance portion will be a general overview of the conditions in common public areas of the improvements considered to be “public accommodations” as defined by the ADA and its compliance with currently available data pertaining to Title III of the ADA. The purpose of the assessment is to identify certain obvious items that do not appear to be in general conformance with Title III of the federal guidelines; without inferring that they are required or that correction of the reported items will bring the property into total compliance with the ADA. Title III requires that architectural and communication barriers in existing “public accommodations” (built prior to the inception date of the ADA) be removed if “readily achievable” and not an “undue burden”. Typical building components reviewed include parking spaces, curb ramps, walkways, entry doors, public restrooms, elevators, drinking fountains, stairs, and alarm systems. The property owner is advised to obtain a complete compliance audit of the improvements and develop a program for correcting any architectural and communication barriers.

All of the work described above is performed for the purpose of generating a Capital Reserve Analysis. The Capital Reserve Analysis has two components:

Immediate Work – Items that require immediate repair such as liability issues, code compliance, etc. and Repairs/ Replacement starting with year one and progressing to the end of the term.

The consultant will use a multitude of sources to complete the cost. The resources can be unit cost from the consultant’s cost database, commercially available cost information such as R.S. Means or cost information from specialty contractors, vendors and suppliers. In cases of physical deficiencies with high complexity or difficulty the consultant may recommend an additional study to determine the appropriate repair or replacement remedy.

Summary

A comprehensive PCA can help you anticipate budgeting requirements, both immediate and future, for the different building components discussed above. This independent third party evaluation and related opinion of cost will give a platform for your building maintenance program. With limited annual budgets, you can direct maintenance dollars to those critical items necessary to maintain the value of the asset.


Federated with and
© 2008, SABOMA
1635 NE Loop 410, Ste. 600
San Antonio Texas, 78209
Tel: 210-822-4499
Fax: 210-822-4490