Real Estate Due Diligence: Property Conditions Assessments

Before lending on a commercial property, mortgage brokers go through an extensive due diligence period. During this time they review many aspects of a property and its history in an effort to minimize risk and understand any potential for loss of value on the collateral. Many of you are familiar with Liberty’s environmental due diligence services or environmental site assessments (ESAs) , which are part of traditional due diligence for most commercial real estate transactions. Liberty provides additional real estate due diligence services, known as property conditions assessments (PCAs), to further evaluate collateral value.

In performing a PCA, an inspector observes and reports on the physical condition of the real property improvements. The inspector identifies obvious defects or deferred maintenance of critical building systems and features, including major structural, electrical, plumbing, and HVAC components. General code compliance and sufficiency for intended use are also reviewed. The PCA report addresses the short term costs of correcting deficiencies and long term (life cycle) costs of operation and maintenance of the site structures and critical building systems.

At Liberty Environmental, our experienced inspectors follow the ASTM E2018-08 industry standards, and additional Freddie Mac, Fannie Mae and/or HUD guidelines when requested. As with our other environmental due diligence services, these reports are customized to meet the specific needs of each client.