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	<title>Commercial Real Estate Inspectors in Los Angeles</title>
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	<description>Commercial, Multi-Family &#38; Industrial Real Estate Inspections for Los Angeles and Southern California</description>
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		<title>6 Mistakes That Could Cost You</title>
		<link>http://www.commercialrealestateinspectors.com/news-articles/6-mistakes-that-could-cost-you/</link>
		<comments>http://www.commercialrealestateinspectors.com/news-articles/6-mistakes-that-could-cost-you/#comments</comments>
		<pubDate>Fri, 14 Oct 2011 01:42:08 +0000</pubDate>
		<dc:creator>Ron</dc:creator>
				<category><![CDATA[News & Articles]]></category>

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		<description><![CDATA[Over the years I have witnessed many mistakes made by buyers of Commercial and Multi-family properties. Here are a few of the most costly: 1. Not getting a professional inspection done on the property BEFORE you buy it. If you &#8230; <a href="http://www.commercialrealestateinspectors.com/news-articles/6-mistakes-that-could-cost-you/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p><a href="http://www.commercialrealestateinspectors.com/wp-content/uploads/2011/10/Costly-Mistakes.jpg"><img class="alignleft size-medium wp-image-273" title="Costly Mistakes" src="http://www.commercialrealestateinspectors.com/wp-content/uploads/2011/10/Costly-Mistakes-300x200.jpg" alt="Costly Mistakes 300x200 6 Mistakes That Could Cost You" width="300" height="200" /></a>Over the years I have witnessed many mistakes made by buyers of Commercial and Multi-family properties. Here are a few of the most costly:</p>
<p>1. Not getting a professional inspection done on the property BEFORE you buy it. If you don’t know exactly what you are buying then you don’t know what needs to be done immediately, what needs further investigation or what the costs to repair will be. This could be as simple as debris on the roof which will block drainage. To the untrained eye this could appear to be insignificant. True story – we told the buyer there was debris on the roof which was clogging the drains. They did not get it removed. A heavy rain flooded the roof which then collapsed and caused many thousands of dollars in damage.</p>
<p>We sometimes hear buyers say they don’t need an inspection “because the building is new”. We have seen expensive-to-remedy flaws even in brand new buildings.</p>
<p>2. Not having a qualified realtor help you through the process. I was on a site doing an inspection and found out my client did not have a realtor. When I asked him what he was going to use the site for I found out they were planning a major conversion to put in a restaurant. I asked him if that was permitted at this location and it turned out that he had no idea that some areas did not allow restaurants due to zoning restrictions or lack of parking. These are the things a qualified realtor knows and can save you untold time, heartache and money.</p>
<p>3. Not getting the parking area resealed on a regular basis. Another true story: the asphalt parking area was left unsealed for over ten years and was now crumbling. Had the area been sealed at a cost of roughly $1,000 about every 5-7 years, the savings would have been approximately $10,000. The cost to reseal is about $.10 &#8211; .20 per sq. ft. The cost to resurface once it is allowed to start falling apart is approximately $1.50 &#8211; $2.00 per sq. ft.</p>
<p>4. Not having the HVAC system regularly serviced. I was inspecting a roof mounted system where the owner decided that instead of changing out the filters on a regular basis, he would just not put any filters in the units. This will save money right? Wrong! It actually caused the internal workings to get dirty and this caused the units to operate very inefficiently to the point that they began to break down. The cost of a filter is usually less than $10 for a very good filter. Had these filters been changed regularly it would have saved many thousands of dollars.</p>
<p>5. Lack of maintenance for the building exterior. Many, many times I see wooden trim, such as at the roof edges or on the sides of the building that had not been touched up over the years. The resulting damage costs many thousands of dollars to remedy. Another example is failing to have the decks sealed when there is a sign of wear or when cracks develop. This mainly occurs with apartment buildings. Again, as in example 3 above, sealing the decks is usually less than 1/10th the cost of having the surface redone.</p>
<p>6. Not having an internal camera inspection of the plumbing waste system when advised to do so by the inspector.</p>
<p>Another true story: I did an inspection on an older, multi building site and had recommended a camera inspection of the waste system. This was a manufacturing site and it was not known what had been poured down the waste lines throughout the years. An internal camera inspection was the only way to determine what shape they were in. The buyer decided he did not want to spend the $300 &#8211; $500 it would take to do this. He moved into the vacant buildings and within 30 days all his waste lines began backing up. He then had the camera inspection done and found out this site was not even linked to the city sewer but had a large underground waste tank on the site which was no longer permitted. This cost him $35,000.00 to fix properly.</p>
<p>The most costly mistake made by any commercial, industrial or multi-family buyer is not performing thorough due diligence. Use a qualified realtor and get a professional inspection. Lastly, listen to them and take their advice! After all, they are here to help and protect you.</p>
<p>Bob Pace<br />
Commercial Real Estate Inspectors, LLC
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		<title>What is a Property Condition Assessment?</title>
		<link>http://www.commercialrealestateinspectors.com/news-articles/what-is-a-property-condition-assessment/</link>
		<comments>http://www.commercialrealestateinspectors.com/news-articles/what-is-a-property-condition-assessment/#comments</comments>
		<pubDate>Wed, 13 Jul 2011 00:58:45 +0000</pubDate>
		<dc:creator>admin</dc:creator>
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		<description><![CDATA[A Property Condition Assessment or PCA for short, is the term for a commercial real estate inspection used by the American Society of Testing and Materials (ASTM). At first glance, this may seem to be a bit technical but bear &#8230; <a href="http://www.commercialrealestateinspectors.com/news-articles/what-is-a-property-condition-assessment/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>A Property Condition Assessment or PCA for short, is the term for a commercial real estate inspection used by the American Society of Testing and Materials (ASTM).</p>
<p>At first glance, this may seem to be a bit technical but bear with me and I’ll attempt to break it down so that it can be easily understood.</p>
<p>Per Wikipedia:</p>
<p>“ASTM International (ASTM), originally known as the American Society for Testing and Materials, is an international standards organization that develops and publishes voluntary consensus technical standards for a wide range of materials, products, systems, and services.</p>
<p>ASTM supports thousands of volunteer technical committees, which draw their members from around the world and collectively develop and maintain more than 12,000 standards.  Anything from plastics, solar, metals, medical devices, paint, general methods and instrumentation, etc……..”</p>
<p>“One of the standards that ASTM has compiled is the Property Condition Assessment or PCA for short.  The actual ASTM name is E2018.</p>
<p>Purpose of ASTM E 2018 is “to determine the base line, or minimum level, for a Property Condition Assessment in the United States for commercial real estate.”</p>
<p>The complete standard is roughly 25 pages long with many references as to how to conduct a real estate inspection of a commercial piece of property.</p>
<p>The guideline for the E 2018 describes a property condition assessment as “the process by which a person or entity observes a property, interviews sources, and reviews available documentation for the purpose of developing an opinion and preparing a PCR (Property Condition Report) of a commercial real estate’s current physical condition. At the option of the user, a PCA may include a higher level of inquiry and due diligence than the baseline scope described within this guide or, at the user’s option, it may include a lower level of inquiry or due diligence than the baseline scope described in this guide.”</p>
<p>Let’s define what is meant by “baseline” according to the guide: “the minimum level of observations, due diligence, inquiry/research, documentation review, and preparation of opinions of probable costs to remedy material physical deficiencies for conducting a PCA as described in this guide.”</p>
<p>It should be understood that concealed physical deficiencies are excluded in PCA’s and they are not generally technically exhaustive.  This means that what the inspector can’t see is not included in the PCA and the use of instruments, testing, calculations, exploratory probing of the property, etc., is not generally part of a PCA. This is because the cost and time involved in gathering this information may far outweigh the value of the information to the customer.</p>
<p>It is important to understand that the ASTM E 2018 is a guideline is for voluntary use by parties who desire to obtain a baseline PCA of commercial real estate. As is made clear by the above reference, the scope of the PCA is up to the user and can range from a baseline assessment of the property to much greater, in depth investigation of the property by various experts. In other words, it’s the customer’s choice as to the overall scope of the PCA based on their requirements and what purpose the PCA is to serve. A professional inspector can help determine the scope needed for the customer’s particular needs.</p>
<p>I personally advise anyone who is going to have a commercial piece of real estate inspected ensure that these standards are used.  This will give you virtually all the basic information needed to make an educated decision.</p>
<p>Aside from the standards being followed, the most important aspect to any real estate inspection is who you hire to do the looking.  How much judgment does he/she have as to the importance of what he finds?   Do they know how to communicate findings in a way that is useful to you or your client? </p>
<p>As Commercial Real Estate Inspectors, we have 15 years experience delivering real estate inspections.  Our unique RISK Assessment™ adheres to the ASTM E2018 standard and fits almost every buyer’s needs. We can also expand it to include any detail required.</p>
<p>Call us TODAY at 818- 957-4654 and set up your next inspection!</p>
<p>Hope this helps!</p>
<p>—Bob Pace
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		<title>What Should You Know About Mold BEFORE You Buy a Multi-Family or Commercial Building?</title>
		<link>http://www.commercialrealestateinspectors.com/news-articles/what-should-you-know-about-mold-before-you-buy-a-multi-family-or-commercial-building/</link>
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		<pubDate>Wed, 13 Jul 2011 00:58:24 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[News & Articles]]></category>

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		<description><![CDATA[Aside from the health hazards attributed to mold, one of the most important factors for buyers and owners of Multi-Family and Commercial property is the cost of remedying serious mold issues. Molds are fungi. Fungi include mildews, molds, mushrooms, rusts, &#8230; <a href="http://www.commercialrealestateinspectors.com/news-articles/what-should-you-know-about-mold-before-you-buy-a-multi-family-or-commercial-building/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>Aside from the health hazards attributed to mold, one of the most important factors for buyers and owners of Multi-Family and Commercial property is the cost of remedying serious mold issues.</p>
<p>Molds are fungi.  Fungi include mildews, molds, mushrooms, rusts, smuts, and yeasts.  Without them we would not have, wines, cheese, bread and some of our medicines such as penicillin.<br />
Molds require moisture, something to eat – which is something organic such as dust or skin flakes – and the proper temperature – in Southern California that is almost all the time.  In ideal conditions, molds can grow in less than 48 hours to the point of being visible.</p>
<p>After extensive research and personally inspecting thousands of homes and commercial buildings over the last fifteen years I have found that mold really is a potential concern; a much bigger concern for some people than others.</p>
<p>Some people are affected adversely by the same amount of mold that doesn’t affect the person next to them in the least. Molds affect each person differently.  The people who are the most susceptible to being affected by molds are the very young, the very old or those whose immune system is compromised for any reason such as chemo therapy or the flu or people with specific allergies to mold.</p>
<p>Per Wikipedia:<br />
Molds are ubiquitous in nature, and mold spores are a common component of household and workplace dust. However, when mold spores are present in large quantities, they can present a health hazard to humans, potentially causing allergic reactions and respiratory problems.</p>
<p>Some molds also produce mycotoxins that can pose serious health risks to humans and animals. Exposure to high levels of mycotoxins can lead to neurological problems and in some cases death. Prolonged exposure, e.g. daily workplace exposure, can be particularly harmful. The term toxic mold refers to molds that produce mycotoxins, such as Stachybotrys chartarum, and not to all molds in general.</p>
<p>At Commercial Real Estate Inspectors we look for mold at all inspections. It is most often seen in the bathrooms in the grout, between the tiles in walls and the tub or shower.  Also, exterior areas which have not been properly sealed, such as around windows and doors, allow moisture intrusion into the walls and ceilings.</p>
<p>Having each apartment checked for mold is a very important and cost effective part of any inspection of Multi-Family properties.<br />
We did an inspection of a Multi-Family building wherein our client had us do only a representative sampling of the units; about 20% of the total.  I advised him to have every unit inspected but the client felt he wanted to “save money” by not paying us to look at every unit.  As it turned out, one of the units we did not inspect had mold issues and the repairs are going to cost over 10X the total price to have us inspect every unit!  Not a very cost effective decision in the end.</p>
<p>When you hire Commercial Real Estate Inspectors, we inspect all the systems in the building, check for mold and provide you with our unique RISK Assessment® report so you know what repairs and upgrades will cost per industry standards.  That way you and your agent can make an informed decision.</p>
<p>Mold is everywhere.  It can grow rapidly, can greatly affect some people even with very little exposure AND it can be costly to repair.</p>
<p>Call us TODAY and book your next inspection!</p>
<p>I hope this helps.</p>
<p>—Bob Pace
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		<title>Don&#8217;t Blow the Deal!!</title>
		<link>http://www.commercialrealestateinspectors.com/news-articles/dont-blow-the-deal/</link>
		<comments>http://www.commercialrealestateinspectors.com/news-articles/dont-blow-the-deal/#comments</comments>
		<pubDate>Wed, 13 Jul 2011 00:57:59 +0000</pubDate>
		<dc:creator>admin</dc:creator>
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		<description><![CDATA[Having done over 6,000 property inspections and having been in the construction field for over 35 years I have some perspective on what happens before, during and after a property transaction. An aspect that comes up every once in a &#8230; <a href="http://www.commercialrealestateinspectors.com/news-articles/dont-blow-the-deal/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>Having done over 6,000 property inspections and having been in the construction field for over 35 years I have some perspective on what happens before, during and after a property transaction. An aspect that comes up every once in a while is being asked to somehow deliver the information in a way so that I dont blow the deal.</p>
<p>At first I used to take this kind of thing personally. I have always been very conscious of how I communicated.</p>
<p>I have felt for many years that it really isnt what you say it is how you say it. I try very hard to deliver what I say in a gentle manner. That does not mean I dont let them know what I find but I dont have to say it with negative adjectives such as, Boy, that was one of the worst electrical systems I have every seen! Or, If that roof doesnt leak at the first sign of rain I would be shocked or anything of the sort.</p>
<p>If the roof is worn and aged and at or near the end of its expected useful life than so be it. I do not have to go into saying it is terrible or how bad or poorly maintained. The difference between the two is something that can color the report and give my client the impression the seller is not a good person or in some way negligent. These may be the case but it is not my job to make that judgment.</p>
<p>I feel very strongly that my job is not to find out what is wrong with the properly but to find out what is. There is a big difference. There are always aspects of any site that are positive. By not having any vested interest or hidden agenda. In other words because I never do any work on any properties I inspect I really dont care what shape it is in. I only do inspections. I dont have any coloring of my judgment as to the condition of a particular system or the site. If something is serviceable and doing the job it was intended to do then it is.</p>
<p>I feel one of the biggest aspects to property inspections is to convey the information in a nonalarming manner. I also feel strongly it is also my job to ensure that the client understands how much longer a particular system will last per industry standards with routine maintenance and to also understand if that building system needs immediate repairs or maintenance.</p>
<p>I have found after many years of experience as a general contractor and having worked on hundreds of construction projects that unless you plan to violate the laws of the physical universe, such as making something levitate, that anything can be fixed. When I look at things from that viewpoint then I dont get emotional or judgmental with my findings. If the roof is old and worn out and in need of replacement then so be it. It will cost so much and then you have a new roof and you wont have to worry for many years.</p>
<p>In todays market in the Los Angeles area most commercial properties are well over one million dollars. When I look at the systems, unless there are major structural issues even if the electrical, plumbing, heating and AC and the roofing all need to be replaced, which is very rare, the cost to replace all are almost never over 10% of the total cost of the transaction.</p>
<p>This means that even if all the major systems, other than the structure, need complete replacement you could, for less than 10% of the total cost of the building have a completely new building other than cosmetics.</p>
<p>I try to look at things for a solution standpoint. Things can be fixed. Stuff wears out. Life happens. Just keep things maintained, repair them when things break down and realize systems have an expected useful life. If well maintained they will last past that time frame usually but eventually mechanical systems wear out and need complete replacement. It is just the way life is. What ever it is it can be solved if you confront it with intelligence. .</p>
<p>I hope you found this informative and of use.</p>
<p>—Bob Pace
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		<title>What you should you know about Sewer Lines BEFORE you buy a Multi-Family or Commercial Building</title>
		<link>http://www.commercialrealestateinspectors.com/news-articles/what-you-should-you-know-about-sewer-lines-before-you-buy-a-multi-family-or-commercial-building/</link>
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		<pubDate>Wed, 13 Jul 2011 00:57:41 +0000</pubDate>
		<dc:creator>admin</dc:creator>
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		<description><![CDATA[What is the true condition of my sewer lines? Is this normal for this type of material and its age? Was the type of material used proper for this location? Are there aspects that are not proper such as incorrect &#8230; <a href="http://www.commercialrealestateinspectors.com/news-articles/what-you-should-you-know-about-sewer-lines-before-you-buy-a-multi-family-or-commercial-building/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>What is the true condition of my sewer lines? Is this normal for this type of material and its age? Was the type of material used proper for this location? Are there aspects that are not proper such as incorrect access, improper size, etc.? How will I know if a serious problem will creep up at a later time?</p>
<p>In commercial sites, chemicals have often been poured down the lines that can cause deterioration at an advanced rate. </p>
<p>Problems can also arise when the building or site has been vacant for any length of time.  This can be an issue due to the lack of flowing water.  Sometimes the constant flow of water keeps things moving and no apparent issues surface.  The lack of flowing water can allow sediment to solidify and cause backups.  It also allows fine roots that may normally be knocked off by the flowing water to grow and become obstructions.</p>
<p>Just the change of use for a site can cause issues.  The new owner is using the underground system in different ways than the old owner.</p>
<p> Here is an example that illustrates why, when we tell you to have a professional sewer line check done, we mean it:</p>
<p>I recently got a call from a client who is having extreme “issues” with his underground sewer line system.  It was backing up into the interior courtyard of the complex of buildings he purchased.  He had bought the property back in January but had just moved in.  The past owner was slowly moving over into his new facility and had been using this one the last few months for storage only.  The site was originally built in the early 1950’s.  This means the sewer lines are almost 60 years old.  The average useful life of cast iron sewer lines is roughly 40– 80 years depending on the material used, who made it and what has been poured down the lines. </p>
<p>He had experts come out to determine what the cause of the back up was.  After extensive investigation it was determined that the system was improperly installed originally and it was going to cost 10’s of thousands of dollars to fix.  The previous owner claims no knowledge of this problem.  He may very well have not known of any problem or any unusual condition.  The system apparently worked for many years.  </p>
<p>I asked my client if he had the sewer-line internal camera work done as I had recommended in my original inspection report. He rather sheepishly said he had not. </p>
<p>Following our advice to do so would have been very cheap insurance.  The risk/reward ratio is so high that these inspections are obviously money very well spent whether this is a commercial site or a multi-family site. The amount of potential grief and agony this can save you is amazing. </p>
<p>We may recommend this type of inspection even for new buildings.  The reason is because many times there was an old building on the site that was torn down and the new hookups are put into the old lines, whether intentional or not.</p>
<p>Another reason we recommend new lines are looked at is because we, in California are in earthquake country and it does not take much movement to separate a line underground.  Also new buildings settle and even a small amount of settlement can disrupt the connections underground.  You won’t ever know this happened unless it gets checked out professionally.</p>
<p>At Commercial Real Estate Inspectors, our professionals and unique RISK Assessment℠ will help you understand the condition of your property BEFORE you purchase it.</p>
<p>Call us TODAY and book your next inspection!</p>
<p>I hope you found this informative and of use.</p>
<p>—Bob Pace</p>
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		<title>Triple Net Lease Inspection, Do I Need One?</title>
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		<pubDate>Wed, 13 Jul 2011 00:57:18 +0000</pubDate>
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		<description><![CDATA[I know Im getting into a Triple Net lease but really its just a lease isnt it? Isnt the owner always responsible for all the physical stuff and I just pay him the rent? I have been in a long &#8230; <a href="http://www.commercialrealestateinspectors.com/news-articles/triple-net-lease-inspection-do-i-need-one/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>I know Im getting into a Triple Net lease but really its just a lease isnt it? Isnt the owner always responsible for all the physical stuff and I just pay him the rent? I have been in a long term triple net lease, do I need an inspection? I am getting ready to end my long term triple net lease, I dont need an inspection do I?</p>
<p>The simple answer is yes you do need an inspection. A bit of education is needed here.</p>
<p>Per Wikapedia &#8211; A triple net lease: (Net-Net-Net or NNN) is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance (the three &#8216;Nets&#8217;) on the property in addition to any normal fees that are expected under the agreement (rent, etc.). In such a lease, the tenant or lessee is responsible for all costs associated with repairs or replacement of the structural building elements of the property.</p>
<p>The precise items that are to be paid by the tenant are usually specified in a written lease.</p>
<p>These are very basic definitions and there are many aspects or variables to each one, however, I feel you do need an inspection by an unbiased 3rd party and here is why:</p>
<p>1. If you are getting into a triple net lease they usually run 5 years or more. You will be responsible for the above listed items. What condition are they in now? What should I expect over the next five years maintenance-wise? Maintenance can be anything from paint to roofing and everything in between. Read the contract carefully and get any questions answered so you fully understand your responsibilities.</p>
<p>2. If you are at the end of your lease what are your responsibilities? What items exhibit typical wear and tear and which are past that point. A good thorough general inspection will help you understand what condition your site is really in and what areas you will most likely to be responsible for.</p>
<p>3. If you are in an extended lease it is a good idea to get a good thorough general inspection every 5 years so you know how things are holding up and what preventative maintenance is needed now or in the near future to help prevent or at least minimize future repairs or replacements.</p>
<p>In my over 30 years of experience good routine maintenance is the most important and beneficial thing that can be done to minimize unexpected expenses.</p>
<p>I recently did a lease inspection for the owner of a property that was going to be taking back possession of a large warehouse &#038; office space from a tenant who had been there for almost 30 years. Very little maintenance had been done. The lessee was now most likely going to be hit with a large bill. Many thousands of dollars could have been saved with a good routine maintenance program.</p>
<p>One example of how this tenant could have saved a lot of money is the parking lot. It was very weathered and worn. It had not had any maintenance for approximately 10 years. It was to the point that it really needed to be resurfaced. The cost difference between resurfacing and resealing is $.20 per sq. ft. to reseal and $2.00 per sq. ft. to resurface. This is 10X!!. Resealing is needed every 5 &#8211; 7 years for this type of facility and if done the surface will last almost indefinitely. In this circumstance there was approximately 10,000 sq. ft. of parking lot to be redone. This is a difference of $2,000 vs $20,000. That is just one area.</p>
<p>Get a good thorough general visual inspection before you get into a triple net lease. Get a good general physical inspection every five years and have a good overall maintenance program and you will save a lot of money, not to mention minimize the unexpected unpleasant surprises such as roof leaks and the AC going out at the most inopportune time. From my experience a good thorough general visual inspection will usually save at least 10X the cost of the inspection.</p>
<p>I hope you found this informative and of use.</p>
<p>—Bob Pace</p>
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		<title>How Real Estate Investors Can Save Money</title>
		<link>http://www.commercialrealestateinspectors.com/news-articles/how-real-estate-investors-can-save-money/</link>
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		<pubDate>Wed, 13 Jul 2011 00:56:57 +0000</pubDate>
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		<description><![CDATA[It has come to our attention that some real estate investors want to know how to save money on property they own. How would this best be done? How do they keep from spending money unnecessarily? How do they make &#8230; <a href="http://www.commercialrealestateinspectors.com/news-articles/how-real-estate-investors-can-save-money/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>It has come to our attention that some real estate investors want to know how to save money on property they own. How would this best be done? How do they keep from spending money unnecessarily? How do they make the money they do spend the most effective?</p>
<p>Here are my answers:</p>
<p>1. Maintenance<br />
2. Timely maintenance.<br />
3. Properly done maintenance.<br />
4. Maintenance done in the correct sequence.</p>
<p>What I am talking about here has to do with annual maintenance inspections and how they actually save you or your client money. I have been contacted in the last six months by some very large corporations, each with millions of square feet of properties and hundreds of buildings, all wanting to have annual maintenance inspections.</p>
<p>Although many of our inspections occur during the sale of commercial real estate or for triple net leases, the climate has changed. As we all know, sales have suffered greatly over the last 18 months in the commercial real estate market. Most of the inspections we are doing currently are cash sales. More people, for various reasons, are keeping their properties longer than ever before. They need to protect their investments. They need to have someone who has no vested interest look at what they have and determine how to keep their investment in the best shape possible for the least amount of money and for the longest amount of time. What do I mean by vested interest? In this case, I mean someone who stands to gain from what they find.</p>
<p>The concept is to have someone who has no vested interest look over the building(s) and give an unbiased report of:</p>
<p>1. The expected useful life left in that system, such as the plumbing, electrical, structural, heating and AC, roofing and grounds.<br />
2. What immediate repairs or further investigation is needed for that system.<br />
3. What you should expect to pay to keep that system properly maintained over the next five years.<br />
4. What condition that system is really in right now.<br />
5. Is the responsible party for the upkeep and maintenance of the site doing their job and are they reporting it accurately?</p>
<p>The companies I mentioned earlier were getting reports of what was being done from a maintenance aspect but they had no idea if these reports were true because the people giving them the data had a vested interest they were companies who actually do the repair or construction work themselves after they provide a sometimes free inspection of the property. In short, the actual service their company sells is not property inspections, repairs/construction. What they need is a professional with no vested interest to give them an unbiased report including a list of what to do and how much these things are going to cost. Your inspector should be someone other than the guy who does the work.</p>
<p>With annual maintenance inspections you find out what condition the site is in, what is being done and how much things are going to cost. Now that the initial inspection has been done by an unbiased party you can get annual updates to determine if the recommended maintenance is being done and if so, if it is being done properly. The only way to know these is to have them looked at by someone who has no vested interest in whether or not what they see is good, bad or indifferent.</p>
<p>As I have said before, after many, many years in the construction trades and over 6000 physical inspections, I have come across a few pieces of wisdom. One of the most significant has to do with how much money is actually saved with proper maintenance. The statement of an ounce of prevention is worth a pound of cure has never been truer.</p>
<p>Have an annual maintenance inspection done, do the recommended items in a professional manner and do them when they are needed. If you do this you can expect your property to last longer than most, cost less in the long run and be worth far more when you do sell it in the future.</p>
<p>I hope you found this informative and of use.</p>
<p>—Bob Pace
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		<title>What is a Phase 1? Do I Need One?</title>
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		<pubDate>Wed, 13 Jul 2011 00:56:34 +0000</pubDate>
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		<description><![CDATA[I have been asked a lot recently about Phase 1s. I realize there is a lot of confusion about them. Let me try to clear the air a bit so to speak. In its simplest terms a Phase 1 is &#8230; <a href="http://www.commercialrealestateinspectors.com/news-articles/what-is-a-phase-1-do-i-need-one/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>I have been asked a lot recently about Phase 1s. I realize there is a lot of confusion about them. Let me try to clear the air a bit so to speak.</p>
<p>In its simplest terms a Phase 1 is a site visit and document review of the surrounding area to determine if further investigation is advised from an environmental stand point.</p>
<p>A Phase 1 inspection is a review of local governmental documents regarding the site to determine what the past usage of the site was along with extensive document review of the surrounding area. It also entails a very involved and detailed site visit by a qualified professional. In addition there is data base information that is gathered and reviewed of the surrounding vicinity to determine if there is a potential risk from an environmental stand point in the immediate area.</p>
<p>These potential risks can be anything from a past gas station on or near the site that might have contaminated the ground water to there having been a dry cleaner on the site that might have spilled chemicals into the ground. There could have been past dumping on the site or an auto repair that did not handle the oils properly, lead in the paint, asbestos, and on and on.</p>
<p>I think you get the picture. The focus of a Phase 1 inspection is environmental not the structure or any of the systems of the building. The systems are the focus of the general visual inspection. They are two separate areas of responsibility. Both are important. Many lending institutions require a Phase 1 clearance before they will lend money.</p>
<p>A Phase 1 inspection is an integral part to many commercial and industrial real estate transactions. One bank that I know of will not lend for any commercial or industrial transaction on real estate over 1.5 million dollars without a Phase I. We are hard pressed to buy anything in the Los Angeles area in the commercial or industrial real estate area for under that.</p>
<p>There are two other aspects to a Phase 1 that may come into play depending on what is found during the Phase 1 inspection and research. These are Phase 2 and Phase 3. As you might assume Phase 2 and Phase 3 are the more involved aspects of the environmental field. Phase 2 involves testing of the site such as coring into the earth and taking samples of the soil along with testing it to determine what is in the soil. The information during a Phase 2 will determine if the site warrants further investigation and/or to be remediated. If remediation is needed this is Phase 3.</p>
<p>Each environmental Phase whether it is Phase 1, 2 or 3, has a very involved set of industry standard requirements. Each requires highly trained professionals to do properly. This is not an area to skimp on. Have a reliable company with vast experience do your Phase 1 inspection. Getting the cheapest deal for something this important I feel could easily be fiscally irresponsible. A properly done Phase 1 inspection really is for everyone’s protection not just the buyer.</p>
<p>The current rate for a professionally done standard Phase 1 inspection is approx. $1800.00 &#8211; $2000.00. Just so you understand to obtain the above mentioned documents is hundreds of dollars by itself. The report ends up usually being hundreds of pages. This price does not usually change unless the site gets very large and very involved. Currently the price stated will usually handle over 90% of all commercial real estate transactions.</p>
<p>I hope this clears the air a bit on what a Phase 1 inspection is.</p>
<p>—Bob Pace
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		<title>Commercial and Industrial Roofing: Proper Maintenance and Care</title>
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		<pubDate>Wed, 13 Jul 2011 00:56:12 +0000</pubDate>
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		<description><![CDATA[In my experience the roof is one thing most buyers and tenants with triple net leases have the most attention on and rightfully so. Proper maintenance and routine inspections are strongly advised. The typical commercial and industrial roof is a &#8230; <a href="http://www.commercialrealestateinspectors.com/news-articles/commercial-and-industrial-roofing-proper-maintenance-and-care/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>In my experience the roof is one thing most buyers and tenants with triple net leases have the most attention on and rightfully so. Proper maintenance and routine inspections are strongly advised.</p>
<p>The typical commercial and industrial roof is a “flat” roof. This means that is has less than 2” of slope or fall for every level foot. Modern standards require all roofing to have a minimum of ¼” of slope for every level foot. This was rarely the case in roofing before the 70’s. Most any roof built in the 70’s and before is almost always very flat and does not shed water well. This leaves areas of standing water. Standing water is a potential problem for two reasons; #1 is when water stands it has a way of finding a weak spot and leaking. #2 is standing water collects dirt and debris that will cause the roofing material to deteriorate faster and leak quicker. (Standing water is any water that is either ½” deep or more and not flowing or is there more than 48 hours after the rain has stopped.)</p>
<p>From my experience maintenance is the single area that can prolong almost all aspects of any building. Proper maintenance of the roof is the cheapest insurance there is. If every owner had a roofer go over the roof every 2-3 years (once it is at least 5 years old) and make any repairs as well as do all the normal preventative maintenance, a roof can last well past its expected useful life.</p>
<p>The usual expected useful life of a flat roof is approximately 13 – 17 years with many roofing materials, if properly maintained, lasting 20 years.</p>
<p>The state of California has energy requirements that are listed in what is called Title 24. These are mandated energy requirements for every building in the state. (It is noted that the enforcement of these mandates is not always consistent.) It covers many areas and with roofing it requires any roof over a “conditioned space”, namely office space, to have a reflective coating over it to help reflect the heat and save on energy. This material can come in many forms from white vinyl plastic to spray on coatings and others.</p>
<p>Where this becomes important is if a building needs a new roof. You may be required to install this type of roof and it costs approx. $1.00 more per sq. ft. to install than a standard roof. However if the roof is older but still has some life left in it, it may be possible to have an applied coating installed over it that costs from $.60 &#8211; $1.00 per sq. ft. There are two distinct advantages of installing this coating over an existing roof. One is that it will prolong the life of the roof and if applied approximately every 5 – 7 years while doing proper maintenance, the roof can last almost indefinitely. The second, and this may be bigger than the first, is that the most efficient of these materials can reflect up to 80% of the suns rays which could be a very substantial savings from an energy stand point not to mention saving wear and tear of the AC units because they are not having to run all the time during hot weather.</p>
<p>Hope this helps.</p>
<p>—Bob Pace
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		<title>The Single Most Important Aspect to Any Building or Site is Maintenance</title>
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		<pubDate>Wed, 13 Jul 2011 00:55:52 +0000</pubDate>
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		<description><![CDATA[After over 30 years in the construction trades and over 6000 physical inspections I have come across a few pieces of wisdom. One of the biggest has to do with maintenance. From my experience maintenance is the single most important &#8230; <a href="http://www.commercialrealestateinspectors.com/news-articles/the-single-most-important-aspect-to-any-building-or-site-is-maintenance/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>After over 30 years in the construction trades and over 6000 physical inspections I have come across a few pieces of wisdom. One of the biggest has to do with maintenance. From my experience maintenance is the single most important aspect of any building or site. Most original construction is fairly good. Most products such as plumbing fixtures and mechanical items such as Heating and AC units will last a reasonable amount of time if properly maintained. That is the rub, if properly maintained. Unfortunately from my experience this is almost never the case.</p>
<p>When I read thorough manufacturers&#8217; recommendations regarding maintenance I never, and I mean never, see anyone do all the different things the manufacturer recommends. I usually get a chuckle at what is expected. (Realize that if these recommendations are not done the manufacturer is usually not liable if the product fails.)</p>
<p>Examples are things like roofing. The manufacturer recommends yearly inspections and maintenance. Nobody does a roof inspection every year.</p>
<p>Same goes for Heating and AC units, these should get yearly maintenance and in fact every 3 months is recommended with the filters being changed every month if necessary. Nobody does that. The ducting should be cleaned every year, nobody does that.</p>
<p>For electrical the panels should have yearly examinations for the connections to ensure they are tight and in some cases have the system examined with thermal imaging to see if there are any &#8220;hot&#8221; spots which indicates potential trouble. Nobody does that.</p>
<p>As far as plumbing goes the water heaters should be drained every year and the pressure regulator should be checked on a regular basis to ensure the pressure is not getting too high. Nobody does that.</p>
<p>The structure of the building should be checked every year to see if there are any issues such as settlement or any unusual movement. Nobody does that.</p>
<p>The site should be examined to ensure the exterior does not have any areas of moisture intrusion due to cracking in the sealing around windows and doors or any cracks in paint that need to be touched up. Ensuring no sprinklers are spraying against the building or trees that are pushing up against the planters or building. Looking at the parking lot to see if the asphalt is worn and in need of resealing before it needs 10X that amount of expense to have it resurfaced. Nobody does all of those.</p>
<p>Now having said nobody does the above mentioned items I know somebody out there is saying but I do!! Yea maybe but I bet you don&#8217;t and if you do I bet you don’t do all of them along with the other couple hundred things to look and see if they are all operating properly or in need of some upkeep.</p>
<p>I also bet nobody goes and checks every toilet to see it they are properly secured to the floor or runs every faucet to see if they get hot water and if so is it in the proper amount of time and not too hot. Or that the flow of water at each fixture is not too much or too little. I know you get the point.</p>
<p>In all my years of inspections I have found only a hand full of buildings that have had really good maintenance programs and of those none did all that I just mentioned. Every building I have inspected has some area that could use improvement. That is the way of the physical universe. As soon as it is installed it begins to deteriorate. Proper maintenance can prolong the life but it can’t stop aging or wear and tear.</p>
<p>I inspected a building recently that had 19 roof mounted HVAC units on it that all but one was over 23 years old. This is truly the exception. The normal life expectancy for roof mounted HVAC units is approx. 15 &#8211; 17 years per industry standards and personal observations. Upon questioning the above owner I found they had the company that had done the original installations servicing these units. They were doing a great job. There were no old replacement parts lying around. All the units were clean and tidy. This is all part of good maintenance.</p>
<p>The quality of the maintenance is another issue. I have seen buildings and sites that had &#8220;regular maintenance&#8221; that were in need of serious repairs in many areas. The place was just being cleaned, and even that was not done well. Good maintenance requires someone that cares and is not afraid to get their hands dirty. It requires people really looking and writing down items observed that need attention and then doing them on a systematic basis.</p>
<p>My suggestion is to have someone look over your building and site on a regular basis that has no interest in whether something is good or bad and giving you a list of those things found that need attention. If this hasn’t been done in the last five years I strongly suggest this now. I suggest this be done at the very least every five years. This inspection usually costs some hundreds of dollars. Per recent estimates these inspections save at least 10X the cost of the inspection. As an example if the inspection uncovers the need to have an HVAC unit fully serviced and this prolongs the life another 2-3 years this alone can be a savings of over $5000.</p>
<p>Having the roof sealed with reflective coatings that cost from $.60 &#8211; $1.00 per sq. ft. of surface can save on energy costs alone to make up for the cost in a few years and may allow the roof to last for at least another 5 &#8211; 7 years.</p>
<p>Here are just two of the many areas that a good thorough general visual inspection could uncover for you that could save you many thousands of dollars over the long haul. It is cheap insurance.</p>
<p>Ensure your site is well maintained. Don’t skimp on these things and everything will last longer which means less unforeseen expenses, which means more money in you pocket.</p>
<p>—Bob Pace
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