Buying or leasing commercial property can be an exciting yet stressful endeavor. As a prospective tenant or buyer, you want assurance that the building and property suit your needs and are free of issues that could negatively impact your business down the road. This is where a thorough commercial property inspection comes into play.
A commercial property inspection provides an objective, in-depth analysis of a property’s condition. While inspections are commonly associated with residential real estate transactions, they are just as critical in the commercial sector. An inspection conducted by a qualified professional can identify defects, maintenance needs, safety hazards, and non-compliant building systems early on, allowing you to make an informed decision about the property.
In this blog post, we’ll explore ten insider tips for arranging and preparing for a productive commercial inspection, ensuring you get the clarity and peace of mind you need.
Work With the Right Inspector
Not all home and property inspectors have the skills and experience required to thoroughly evaluate commercial real estate across building, life safety, and operational systems. Be sure to engage a properly certified and experienced commercial property inspection professional. Qualifications to look for include:
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Licensed or certified specifically in commercial property inspection
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Extensive expertise inspecting office buildings, retail centers, warehouses, hotels, apartment complexes, and other income properties
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Affiliation with leading national and state inspector associations
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Strong reputation with years inspecting commercial real estate in your area
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Use of customized inspection report formats detailing observations not found in basic home reports
Taking time to verify these qualifications will pay off tremendously in more robust findings.
Schedule the Inspection Strategically
Timing your commercial property inspection strategically within the buying or leasing process can optimize its usefulness. As a tenant, consider having the building inspected before signing a letter of intent versus after, while conditions and rights to withdraw may still apply.
For buyers, inspections ideally take place after the initial property tour but before the inspection objection deadline in your purchase contract. This allows time to uncover issues and renegotiate any repairs or price concessions with the seller should significant defects arise.
Build enough buffer days into the transaction calendar to accommodate the full inspection and integrated pest inspection if applicable, discuss findings with key stakeholders, and formulate requests to the other party.
Do Your Homework
Before the appointed inspection date, gather and review key documentation about the commercial property that will help orient the inspector and provide critical context once on site. Useful items to pull together include:
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Property surveys, subdivision plans, zoning records
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Construction plans and specifications
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Inspection and maintenance records
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Remodel, repair, retrofit, and upgrade permits
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Utility bills and expense histories
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Warranties and equipment service records
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Site assessment reports or Phase I/Phase II environmental studies
Having these items handy for inspectors allows them to dive deeper during their limited time evaluating the property and systems.
Meet the Inspector at the Property
Rather than just dropping off keys, plan to accompany the commercial inspector during at least part of their site visit. Meeting on location enables you to exchange insights face-to-face, get clarification around systems or areas of ambiguity, and observe some of their process first-hand.
If joining them for the full inspection day is impractical, see if a property manager, facilities lead or other representative might shadow them instead. Providing a guide who is familiar with the building’s layout and mechanics often enhances the inspection’s completeness and accuracy.
Discuss Safety and Legal Matters
Given their frequent exposure to property risks, inquire what hazardous materials, environments, or activities your commercial inspector prefers to avoid for health and safety reasons. Most inspect well beyond minimum legal requirements but have reasonable limits regarding maneuvering on rooftops, entering confined spaces, exposure to mold, asbestos, lead risks and more.
Also mutually confirm any inspection confidentiality, licensing rules, duty to report requirements, dispute resolution processes or other legal aspects ahead of time to establish proper expectations. Handling administrative details upfront prevents headaches later should substantive issues ever arise.
Due Diligence Beyond Basic Inspections
While commercial property inspectors provide immense value examining structures and systems, for optimal risk management consult additional specialty evaluators as well. Expanding reviews across these further facets adds crucial perspective when committing to higher-stakes commercial sites:
Environmental Assessment
Inquire what prior land uses existed before current construction through historical research and Environmental Site Assessments. Many buyers unwittingly acquire liability for pollution originating under previous owners. Know what hazardous materials usage or storage has occurred on site needing mitigation under regulations.
Geotechnical Study
Have properties examined for soil stability, drainage adequacy and seismic, flood and storm vulnerabilities relative to the local region, with recommendations for reinforcement. Unexpected earth movement or water intrusion destroys buildings.
Fire Life Safety Audit
Ensure sufficient, functioning alarms, extinguishers, sprinklers, egress routes and personnel protocols are in place to uphold fire codes and organizational resilience requirements. Shortcomings leave occupants dangerously exposed.
Insurance Risk Evaluation
Request an impartial review by qualified insurance professionals regarding the property’s insurability protecting against pollution events, floods, earthquakes and other natural catastrophes common to the geographic area. Owners often underestimate exclusions when disaster strikes.
ADA Accessibility Survey
Determine if existing facilities meet construction specifications in the Americans with Disabilities Act and related legal accessibility and inclusion mandates. Litigation and retrofits get expensive if issues get overlooked prior to acquisition.
Energy Conservation Analysis
Having an energy efficiency specialist evaluate older properties reveals opportunities for upgrades curbing utility costs and carbon footprints significantly via 21st century building technologies. Savings multiply over time with proper capital planning.
Seismic Risk Assessment
In earthquake prone regions, engage structural engineers to calculate expected accelerations and analyze vulnerabilities requiring reinforcement to boost safety and prevent building collapses when the inevitable tremors strike. Knowledge and preparation save lives.
Closing Thoughts
In closing, few things provide more valuable risk and stress reduction for significant commercial property investments than Commercial Property Inspections performed by qualified industry experts prior to purchase or lease signing. Treat the inspection process seriously, ask lots of questions, seek multiple expert perspectives beyond basic examinations, and address issues proactively. The effort leads to optimal returns for years to come. Best of luck with your commercial real estate endeavors!
