Accident Investigations

One thing that some property managers don't realize is that they should have their properties inspected when an accident occurs on the property. A small appliance failure that leads to a fire, is definitely grounds for inspection, and there are plenty of forensic engineers out there ready to check things out for you. Now they definitely do not do it for free, but the risk of not catching something preventable that may lead to a bigger accident, and even bigger claim is something I think anybody is more than prepared and ready to do. That is about all I wanted to add for today's post, but keep in mind...accident investigations are very important for people wanting to keep their customers safe, and their pocketbook full.

Property Assessment on the Rise

The recent market tank and banking fallout is probably going to add some strange incentives for people with a lot of cash on hand. What this translates to is probably going to be a spike in investments in small to medium sized buildings under about $3,000,000. While most companies would require loans for these kinds of properties, some do not seek them out and rather pay all up front and begin to collect their money from the leases. Since the commercial and residential sector is pretty badly damaged, I expect that a whole lot of people are going to need to rid their portfolios of these smaller leasing goldmines, and they are likely to be bought up quickly and quietly, at amazing discounts. The end result is going to be a linear rise in property assessment services and building investigations. Why this is a good thing is for a number of reasons, stemming from a likely real estate boom in the next 5-10 years, and those who have the ability to invest now will have very worthwhile properties to sell once the time is again right to buy.

Innocent Landowner Defense

Most would agree that commercial real estate investment is risky business. Hiring a professional to conduct a Property Condition Assessment along with a Phase I Environmental Site Assessment is essential and will be required by your lender.

Environmental Professionals use information services to round up many of the easily obtainable public records required to establish you as an "Innocent Landowner" - a term you will become very familiar with should a property you own ever be determined to contain hazardous materials.

Was there a gas station located on your site in the 1920s? You better have checked into it. How about a former drycleaner? Now, what about all of the sites within a one mile radius of your property?

The EPA http://www.epa.gov has loads of information on your responsibilities as a prospective purchaser. Don't worry, the company you hire to evaluate the property along with your attorney and your lender will help you sort through all these requirements.

It is a lot of information, and finding the information is now the easy part, thanks to companies like Environmental Data Resources (EDR) http://www.edrnet.com/. You need a professional to determine what risk, if any, current and past activities on your site and sites in the study area pose to your property.

Even if the property you want to purchase has recognized environmental conditions associated with it, you will still be able to purchase while protecting yourself and making it clear who are the Responsible Parties.

Condition Surveys and You

Condition Surveys are quickly becoming the standard for companies looking to invest in property. What they accomplish is bar-none one of the most important topics you must analyze before plunging into new real estate. Not only is a Phase I ESA important to investors, but also inspecting the status of the buildings various systems, HVAC, elevators, etc... is a crucial part of any report. A full service inspection includes a Condition Survey and a Phase I Environmental Site Assessment. These two combined equal an excellent way to understand the complete condition of a property before you even have the chance to lose money.

I've been scouring the net for a good article on why you should have a condition survey done on your property and have yet to find anything really good as of yet. Hopefully I will find something soon and post it up, but for now just take my word for it. By performing an in depth investigation into a property pre-purchase, you only increase the chances for profit, and nearly erradicate the possibility of surprise.

Various companies around the country provide Condition Surveys and Property Condition Assessments, some of which even offer to travel to a location thousands of miles away. Generally it is good practice to find a company that is located centrally, and has a good reputation. Try finding companies that pair building condition survey with a phase I esa for even better value.

Recent Developments in the Omaha Area

Here in Omaha, a large amount of commercial buildings have been going up. There are millions of square feet of space available for lease, yet only a calling for around 35% of that. As the interest rates were falling in the last few years, more and more properties were springing up. Several new buildings have been under construction in West Omaha around Dodge Street, and it's interesting considering that there isn't a particular demand for Leased Space as it is. The competition for the Commercial Landlords has become intense, and forced them to investigate ways of enticing new companies into their spaces. High-tech and state-of-the-art are the only ways to draw people near, assuming the price is right.

The places here in Omaha are not as expensive as it could be, either. Another huge pull to the bustling Nebraska City is the cost of living. In Omaha it takes about 1/3 as much the annual income to live comparably in a bigger city such as Los Angeles or New York City. Between this and the rather disproportionate business diversity (for a city of its size), the draw to commercial business developments is quite clear.

Property Condition Assessments

In the last two years I have started to notice a trend in investment and brokerage companies spending massive amounts of cash without spending even a minute in safeguarding themselves. Investment properties can be an excellent source of money, especially to companies that HAVE the money to drop on a big apartment complex or large building for leasing. This is the part of the business that I have a problem with. The investors that are only investing in smaller parcels and buildings should focus on spending some coin on worthwhile insurance, such as PROPERTY CONDITION ASSESSMENTS!! The larger guys I guess have more experience and feel more confident about the properties they purchase, but if anything they have just as much responsibility with having the site examined as anybody.

These Property Condition Assessments are an excellent tool, and there is no reason for you to not take advantage of them. Top types of properties can range from the following:
- Schools
- Hospitals
- Commercial Buildings
- Apartment Buildings
- Condos
- Resturaunts

...but all are important! Remember how imperative it can be that you get these done. The last thing that anybody wants is to end up with a beautiful building on a piece of land that is constantly emitting toxic gas because it used to be a waste dump. Get a Phase I Environmental Site Assessment (ESA) done! Still don't know why you should? I suggest checking out the wikipedia article about the Phase I reports, it is pretty well written and has great sources and links to other great resources. Check out other blogs as well, such as this one which has great information about JUST Phase I ESA's and Phase II ESA's.

Importance of Property Assessment

Recently, a friend of mine brought up an excellent point. It is important for investors to take a look at getting a phase i ESA done on ANY property that they are looking at buying. Some people feel especially at peace when purchasing parcels within their comfort zone (as far as location) and figure they'll cut costs by not ordering an environmental report. This is a terrible practice to follow and will ALWAYS end up costing you more in the long run. Looking just at this rather minuscule cost in the scheme of things, it makes no sense to not order an environmental report. Understanding what environmental factors may be affecting your site is absolutely necessary!

Checklist for Property Condition Assessment

For anyone looking to purchase or lease a commercial property, or for those who currently own commercial real estate, there are plenty of items to look for to ensure the safety of the property. In fact, for a business owner, it can often become a terrible headache to deal with the stress and complications of securing a place for your company. Luckily, there are plenty of ways in which an experienced assessment company can simplify the process of assessing the condition of a property, and also investigate and prevent serious structural, electrical, or environmental issues before they become a serious liability!

Use Your Assessor as a Resource

Your property assessor should be used as a resource for your commercial real estate endeavors. Some may consider assessment services to be helpful, but somewhat unnecessary. For those who have this perception, you may not be using their services to their fullest potential! First, the assessor or their staff can help inform and educate business owners about the entire process of assessing commercial real estate properties, and can also advise them of deadlines, government records, and other items that can affect which property you should procure for your business. In addition, property condition assessment is one of the best ways to detect potential hidden problems within a property, beyond what you may see on the surface. Having a property that provides an attractive environment for your business is one thing, but finding one that is safe, secure, and will also provide high standards in a building’s overall condition is truly different, and a skilled property condition assessor can provide exactly that.

Ensure an Environmental Assessment is Performed

In many cases, depending on the nature of a business, such as those in manufacturing, an environmental assessment may be required. There are plenty of business owners who may feel an environmental assessment may be avoidable, especially considering these assessments aren’t cheap! But choosing to save money and not have this performed may be risky since problems could arise at the property that could expose you and your business to a huge liability. Having an environmental assessment performed can most certainly help prevent such issues from arising.

There are two types of environmental site assessments, the Phase I and Phase II. Phase I environmental site assessments, also known as Phase I ESA reports, can help identify potential environmental liabilities through an inspection of the property and a review of the property’s records, but doesn’t involve extensive testing or sampling of the environment. Phase II on the other hand includes the measures included in Phase I, but also involves soil, ground water, and surface sampling to detect environmental hazards and liabilities. These reports will also be helpful in that they should also recommend options should problem areas be detected.

Forensic Engineering Could Be a Lifesaver

Many commercial assessment companies also provide forensic engineering services, and could be a good way to prevent future safety hazards. The process of forensic engineering is a service for insurance companies and commercial property and business owners that investigates materials, structures, and products that do not work property or fail to function as intended. This investigative service is not commonly required, but it should be employed if you have even a slight suspicion of a potential mechanical or electrical failure.

The benefit of forensic engineering investigation is that it could prevent catastrophic accidents, or at the very least ensure they don’t reoccur. If an accident does occur, such services can help save lives in the future, and also reduce legal consequences should another accident arise! Companies and individuals that provide forensic engineering services are often comprised of fire investigators that can identify the origin and causes of a fire to prevent a re-occurrence. Fire analysis is a blend of forensic sciences and fire science that helps reduce the liability that a business or property owner has to endure, and is the ideal solution for getting many of your own questions answered following a terrible fire or accident.

Receiving these services is important for safety, security, and peace of mind. Should questions arise about assessment services, it’s important to contact local assessment companies or consult your board of equalization or board of assessors to get additional help or recommendations for getting a fair, beneficial property assessment.



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Welcome to the Property Assessment Blog

Thanks for visiting the property condition assessment services blog. We'll be discussing a range of important assessment and investigative services that can be beneficial to many businesses and property owners. Please keep checking back for additional resources on the various specialties comprised within this important field.

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