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

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Controlled Recognized Environmental Condition (CREC)

June 27, 2013

Controlled Recognized Environmental Condition (CREC) is a proposed new term for the ASTM E1527 standard for Phase I Environmental Site Assessments (ESAs).  The Controlled REC concept was introduced to address contaminated sites that have received risk-based regulatory closure, where no further remediation is required but residual contamination still exists at a site and the property is subject to activity and use limitations or “AULs.”  These sites, where contamination is controlled but could still pose ongoing or future obligations on the owner (such as special precautions during construction or grading activities), have been a source of some confusion to the environmental due diligence industry with regards to how they should be classified.  The Controlled Recognized Environmental Condition or “CREC”, if accepted, would be a distinct classification from Historical Recognized Environmental Condition (HREC) and Recognized Environmental Condition (REC). The environmental professional would be required to list any CRECs identified in the findings and conclusions section of the Phase I Environmental Site Assessment report.


De Minimis Conditions

June 11, 2013

De minimis conditions are defined by ASTM as environmental conditions that “generally do not present a threat to human health or the environment and that generally would not be the subject of an enforcement action if brought to the attention of appropriate governmental agencies.” A de minimis condition is not considered a recognized environmental condition. An example of a de minimis condition might be a small, superficial spill of oil that is not anticipated to cause a significant concern.


Business Environmental Risk

June 6, 2013

Business Environmental Risk is characterized by the American Society for Testing and Materials (ASTM) as “a risk which can have a material environmental or environmentally-driven impact on the business associated with the current or planned use of a parcel of commercial real estate, not necessarily limited to those environmental issues required to be investigated in this practice (ESA, ASTM E1527-05). Consideration of business environmental risk issues may involve addressing one or more non-scope considerations.”

The conventional non-scope environmental business risk items alluded to include:

  • Asbestos
  • Lead Paint
  • Lead in Drinking Water
  • Radon
  • Wetlands
  • Ecological resources
  • Endangered Species
  • Cultural and historic resources
  • Regulatory compliance
  • Industrial Hygiene
  • Health and Safety
  • Indoor air quality
  • Biological agents
  • Mold

Business Environmental Risk is by definition very broad and can encompass many types of risk, not limited to the above list.


Environmental Site Assessment- ESA

May 29, 2013

The Environmental Site Assessment is a process of evaluating the environmental liability of a real estate asset. Specifically, Environmental Site Assessment or “ESA” is the process of conducting “all appropriate inquiry” into the past or present uses of a property to determine whether the property is impacted by a “recognized environmental condition” (REC). The ESA process includes a site inspection, a review of historical records of the property and research of records available at government agencies. This information is detailed and evaluated in the Phase I Environmental Site Assessment Report, and an opinion is made as to whether past or present activities may have caused a release of hazardous substances or petroleum products at the property. The ESA is the primary tool used to qualify a user for the Landowner Liability Protections under CERCLA. Learn more about ESAs here.


Environmental and Engineering Due Diligence in Denver

April 2, 2013

Since 2010 Partner has completed 749 projects across Colorado with 165 in Denver. The Partner Colorado office provides Phase I Environmental Site Assessments, Phase II Environmental testing, Property Condition Assessments, and Asbestos Surveys in support of commercial real estate transactions.

Partner is the national leader in Phase I Environmental Site Assessments by volume. Most 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.

In addition to providing Phase I ESAs, Partner provides Property Condition Assessments and Commercial Building Inspections for a wide variety of clients, including: CMBS lenders, Fannie Mae/Freddie Mac lenders, and equity clients. Most of our reports are performed to meet the standards set within ASTM E2018-08 guidelines.

Partner performs Phase II Environmental Testing either in support of a financing decision or to meet the requirements of the Colorado Environmental Protection Agency (CEPA). Most of our reports are performed to meet the standards set by ASTM E1903-27(2002).

Colorado has their own Hazardous Waste Act (CHWA) separate from federal laws with independent authority to regulate and enforce cleanup. Partner Denver staff is familiar with CHWA specifications and can navigate Colorado clients through the process if needed.

Partner performs radon testing and consulting services for a variety of commercial and multi-family residential properties. The Partner Denver staff recognizes that many Colorado counties fall within the EPA’s Radon Zone 1 and could potentially have high levels of radon, representing a concern to indoor air quality.

For recent projects and experience that provide insight into our Colorado consulting practice visit http://www.partneresi.com/city/denver.php


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