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The Devil Is In The Details: Property Condition Assessment

When acquiring a new asset, it is important to complete a full due diligence assessment.  Due diligence is a comprehensive, complex and critical stage in any commercial real estate acquisition. Part of the due diligence is the Property Condition Assessment (PCA) and Property Condition Report (PCR) which helps eliminate many surprises and unexpected issues.

How Does The Assessment Work?

Standards exist for PCA and your inspection company should be accredited and follow guidelines when evaluating facilities.  The PCA should include four components:

  1. Documentation review and interview facilities and maintenance staff
  2. A walk through survey of equipment
  3. Preparation of opinions of probable costs for repairs and replacements
  4. Property Condition Report


What Does The Assessment Cover?

Site and grounds- pavement, curbs, loading docks, walks, landscaping, irrigation, site drainage, exterior lighting, walls, fencing/railings, signage and exterior amenities

Structural systems- foundations and structural framing of walls, columns, intermediate floors and roofs

Building envelope- roofing systems, exterior finishes, stairs and steps, exterior doors and windows

Mechanical systems- electrical, heating ventilation, air conditioning, plumbing and conveyance systems

Interior building components – interior finishes of common areas and tenant areas

Regulatory compliance- life safety and fire suppression systems


Overall the assessor’s PCR  will provide a short paragraph specifically stating the purpose the PCR should serve and the scope will Identify the improvements that need to be completed, a capital budget and the life expectancy on each piece of equipment.