What is a Property Condition Assessment?

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 with me and I’ll attempt to break it down so that it can be easily understood.

Property Conditioning Assessment & ASTM

Per Wikipedia:

“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.

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……..”

“One of the standards that ASTM has compiled is the Property Condition Assessment or PCA for short. The actual ASTM name is E2018.

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.”

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.

Purpose of the Guideline

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.”

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.”

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.

Voluntary Usage

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 too 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.

I personally advise anyone who is going to have a commercial piece of real estate inspected to ensure that these standards are used. This will give you virtually all the basic information needed to make an educated decision.

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?

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.