When it comes to purchasing commercial property in Alberta, it's important to understand the process of Building Condition Assessments and Phase One Environmental Site Assessments. These assessments play a crucial role in determining the value of a property and can greatly impact buying decisions for commercial property investors. Here we will discuss the basics of building assessments and property site assessments for commercial properties in Alberta.
What is a Building Condition Assessment?
A Building Condition Assessment is an evaluation of a property's physical condition, functionality, and overall value. It is typically conducted by a professional assessor who has expertise in commercial buildings. The assessment evaluates the age of the building, its location, safety concerns, and any improvements or renovations that have been made. A final written report will summarize the building’s overall condition and includes photos, written documentation and any observed deficiencies.
Why are Building Condition Assessments Important?
A Building Condition Assessment provides valuable information for both commercial property buyers and sellers including:
- A review of current zoning and uses of the property. The buyer can use this information to determine what uses are permitted on the property and what changes may be required to allow for different operations to function at the site.
- Protection from buying a “money pit”. From a financial standpoint, an independent Building Condition Assessment protects you from lurking problems such as hidden water damage, drainage issues or a neglected roof. The buyer will also be able to estimate any short-term repairs and long-term maintenance.
- Comparing the Value of Repair, Renovation or Replacement. Building Condition Assessments also provide valuable information to current commercial real estate owners who want to assess the value of a repair, renovation or demolition.
Ritchie Market in Ritchie, Edmonton
Key Components of a Building Assessment
The Building Condition Assessment will specifically evaluate the state of the following:
- Structural Integrity Assessment. This involves evaluating the condition of the building’s structure including the roof systems, foundations and superstructures. Do these systems need maintenance?
- Mechanical Systems. This involves assessing the heating, ventilation, electrical systems, air conditioning, plumbing and conveyance systems. What is the condition of each system and how long are they expected to last?
- Life Safety Systems including exits, fire alarms, sprinkler systems, etc. Are they up to code?
- Site Features including drainage, servicing, parking, building accessibility for special needs, curbs, pavement, exterior amenities, etc. Are there drainage issues?
- Projected Useful Life of the buildings and property; How long are they expected to last?
- Required Repairs and damages or concerns with the building and surrounding property.
The Brewery District in the Oliver Neighborhood in Edmonton, Alberta
Other Types of Assessments – Phase One Environmental Site Assessment
A Phase One Environmental Site Assessment (Phase One ESA) is another risk mitigation tool similar to a Building Assessment that protects the buyer. Before finalizing the commercial real estate transaction, the buyer can opt for a Phase One ESA which assesses any potential environmental contamination. This assessment is a valuable tool that investigates any potential sources of contamination that could deem your property worthless. Often banks will require a Phase One ESA for commercial property loans.
The Path Forward
Commercial property assessments are an essential part of the buying process in Alberta. They provide valuable information to both buyers and sellers and play a crucial role in determining the value of a property. By understanding the basics of building assessments, buyers can make informed decisions and ensure a protected investment in the commercial real estate market.
From Building Condition Assessments to Phase One ESAs and full scale commercial developments, we invite you to connect with Bolson Engineering and Environmental Services. Together, we can turn your vision into reality. Don't miss out on the incredible potential that awaits you in the world of development - take the first step towards success by reaching out to us today.
