A strange consequence of this disappointing economy we’re experiencing has been the immense activity seen in the Commercial and Industrial markets. The advent of competitive lease rates has forged increased movement from companies finding it wise to either relocate or purchase a building. Like the housing market, the cost of purchasing (even with the improvement costs) is often less expensive than leasing. Moreover, purchasing an asset today is superior to having cash on hand, particularly when inflation is eminent…and it is…
Basing your decision on overall square footage, price per square foot, and appearances can produce disappointing results when keys exchange hands.
Purchasing a new commercial or industrial building is not as simple as finding the right Broker, location, and purchase price. An objective, apples-to-apples comparison between available building options is the only way to confirm a Buyer’s instincts. It is very, very easy to fall into the trap of selecting a building based on carpet color, ceiling condition, and bathroom finishes. Basing your decision on overall square footage, price per square foot, and appearances can produce disappointing results when keys exchange hands.
A comprehensive building assessment is simple and inexpensive, providing you with an effective snapshot of your prospective asset. This “lens” gives visibility into your property and would consist of a concise report with the following information:
- Evaluation of the mechanical and electrical systems: Just finding out the age of these systems can be meaningless. The efficiency, capacity, adaptability, and expandability on the other hand, provides transparency into the ROI of the tenant improvement costs
- Assessment of the structural components of the building:
- Understanding the floor/roof structures to accommodate future loading configurations prevents “surprises” later in the tenant improvement design.
- Verifying whether walls/slabs/roofs can be penetrated can be just as important. Anecdotally, I had a client who once purchased a building thinking they could construct a convenience stair between floors, only to find out the pre-stressed concrete floor slab could not provide such a feature without immense cost;
- Distinguishing between typical vs. alarming cracks in concrete walls/slabs/beams gives an indication of the performance and use of the building to-date.
- Documentation of the egress, access, and space parameters/constraints: Understanding these constraints ahead of time helps validate that your company’s specific programming and space layout needs can be met;
- Evaluation of the roof composition and condition; verify whether water intrusion has occurred;
I have had some clients go through this building assessment process numerous times before finding just the right building that suited their needs. And why not? If you would take a used car to a trusted mechanic before buying, why not have trusted design professionals evaluate your prospective property? The fees to produce such a report are a mere fraction of the total investment , providing a meaningful tool for understanding the building’s performance relative to YOUR specific needs. An evaluation team consisting of an architect, structural, mechanical, and electrical engineers, working in concert with one another and with your Broker, can deliver great results within 3-5 days of the onsite observation---sometimes faster. In this economy, you’re in the driver’s seat.
Be sure you have the tools you need to make an informed decision.