Property Condition Assessment / Property Condition Report

August 8, 2013

Property Condition Assessment, also called a Property Condition Report, is an evaluation of the capital expenses that will likely be required to maintain an asset in the short- and long-term.

The standard scope of work for the Property Condition Assessment is defined by ASTM E2018 and includes a walk-through survey of the property to assess the condition of building systems, components and other property improvements, and interviews and documents review regarding the age and condition of property improvements. The Property Condition Report includes tables of the short-term capital expenses (Immediate Repairs Table) and long-term capital expenses (Replacement Reserves Table).
PCAs can help lenders or buyers understand how the condition of the building and site improvements will impact the asset’s financial performance.

Learn more about Property Condition Assessments 
Watch a video about Property Condition Assessments


Phase I ESA in Dallas

February 19, 2013

An environmental professional who understands the unique attributes of Texas, including up to date UST regulations and oil gas wells Petroleum Storage Tank (PST) regulations, and the particulars that can come with land previously used for cattle ranching, is pertinent to commercial real estate due diligence in Texas. The Partner Dallas office provides Phase I Environmental Site Assessments, Phase II Environmental testing, Property Condition Assessments, and Asbestos Surveys in support of commercial real estate transactions

Most of Partner’s reports are performed to meet the standards of ASTM E1527-05. Partner often customizes reports to meet individual client or agency lender’s (Fannie MaeFreddie Mac) requirements.

Partner performs Phase II Environmental Testing either in support of a financing decision or to meet the requirements of the Texas Commission on Environmental Quality (TCEQ). Most of our reports are performed to meet the standards set by ASTM E1903-27(2002). Partner Dallas professionals are familiar with the diverse geology and topography of Texas as well as state programs, such as the Dry Cleaner Remediation Fund (DRRP).

Partner has completed engineering assessments on all types of commercial real estate including office, retail, multi-family, industrial, and hospitality. Some recent projects and experience that provide insight into our Dallas consulting practice include:

Partner completed $56K worth of work, including A Phase I Environmental Site Assessment with a sub-specialist inspection for MEP (Mechanical, Electrical, and Plumbing), and a Property Condition Report for an airport in Addison, Texas.

Partner completed Phase I Environmental Site Assessments for a 175 property portfolio across the country. Fifty-three of those projects were in Texas with 11 of them in Dallas.

For more on recent projects Partner has performed in or near Dallas, visit

Property Condition Assessments

December 18, 2012


A Property Condition Assessment (PCA) is a survey of a property by an architect, engineer, or commercial building inspector in order to understand the condition of the building. A Property Condition Assessment Report (PCR) is generated and discusses each building system and its condition. Different lenders can have varying requirements regarding a PCR, but a common guide is the ASTM E2018 Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process.

The most important part of the Property Condition Assessment Report is the Immediate Repairs table and the Replacement Reserve Table, which helps the client understand how the condition of the building will impact the assets financial performance. Safety concerns usually show up in the Immediate Repairs Table along with failing or damaged building systems, while maintenance issues that can be deferred will be in the Replacement Reserve Table.


  • Site Assessment
  • Interviews
  • City Building Department

Building Systems Evaluated

  • HVAC Systems
  • Elevators
  • Plumbing
  • Data and Telephone
  • Boilers
  • Electrical
  • Fire Suppression Systems


Building Evaluation

  • Foundation
  • Structure
  • Roof Diaphragm
  • Interior Finishes
  • Building Envelope


Site Improvements Evaluated

Commercial Building Inspection

January 23, 2009

When buying a commercial building, real estate investors are well served to engage a high quality building engineering due diligence firm to conduct a Commercial Building Inspection.   Commercial Building Inspections are also referred to as Property Condition Assessments.  

When clients call me for a Commercial Building Inspection, I make every effort to understand their needs.  Often I propose a walk through inspection, were an experience building inspector walks through the asset and inspects all building systems.  The inspector prepares a comprehensive Property Condition Assessment Report which includes a discussion of the following building systems:



          Building Envelope;

          Mechanical, Electrical, and Plumbing;

          HVAC Equipment



          Fire Suppression and Security Systems;


          ADA Compliance.

My inspector will include in the report an Immediate Repairs Table and a Replacement Reserves Table.   The second table will typically estimate the building’s capital replacement schedule for the next twelve years.  

When clients are looking for a more detailed report I offer a Property Condition Evaluation report which includes specialist inspections.  The most common specialist to add is that of a structural engineer.  The structural engineer will produce a structural report or a Probable Maximum Loss Report, when in seismic zone 3 or 4.  

Other specialists that add great value are mechanical specialist, roof specialists, and elevator specialist.  The specialist invests 4 to 8 hours inspecting only the one system.  For example, the HVAC specialist will turn on the air conditioning system in the dead of winter.  The specialist opens up the systems being inspected and collects parametric data.  The result of the more detailed inspection is a very detailed report with specialty reports in the appendices.  Partner Engineering’s project manager and field inspector is almost always a registered engineer or very senior building inspector. 

In two out of three engagements, we help our client get a significant adjustment from the seller.   In one out of three engagements, we help our clients get a adjustment of 5 times our fee or more from the seller.   This service really pays for itself!

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