Assessment is conducted to thoroughly understand the condition of the commercial property.
A property can be assessed in two different ways. You can carry out a PCA (Property Condition Assessments) or an FCA (Facility Condition Assessments). Now, it can be confusing as to conduct which assessment.
In the broader term, both assessments are done for understanding the condition of the property, but the results are different. For example, if during the assessment a crack is discovered in the ceiling, FCA will only estimate a lower value of the property. But PCA will investigate the reason behind the crack and suggest a solution to fix it.
GW Partners - Commercial Real Estate Firm in Austin will guide you in each step of the assessment and also advise you which assessment is needed at what stage.
Let’s quickly dive into the differences between the PCA and FCA.
What are Property Condition Assessments?
As the name suggests, PCA refers to inspecting the condition of a commercial property. PCA is usually, done by an investor as a part of the due diligence process before making a property deal. It is also done by a lender before financing a property. PCA is conducted on a single property. You may hire a single building inspector or an engineer or a specialist such as a mechanical engineer or electrical engineer to complete a PCA.
During a PCA, a professional along with a commercial real estate agent will thoroughly inspect the condition and all systems of each building on the property. Any structural damages and non-functioning systems in the building will be noted. Current capital expenditure for repairing the damages and system will be estimated.
Based on the current condition of the building structure and components, future maintenance expenditure of the property will also be predicted. Professionals may also recommend improvements to maximize the featured property life. Thus, a PCA will help a prospective buyer in understanding how profitable the deal is. Also, the buyer becomes aware of the risk and liability involved in purchasing the property.
PCA involves inspection of the foundation, ground, and exterior of the building, interior building components, and all mechanical systems.
What are Facility Condition Assessments?
Similar to PCA, FCA is also done with a view of inspecting the structure of the commercial property but the goals are different. FCA is usually done by the owner of a commercial property to reevaluate the value of the property. It is conducted in groups of buildings.
A team of one or more specialists completes an FCA. A property owner conducts FCA to evaluate the current value of the property and estimate the capital needs to enhance the efficiency and profitability of the property. FCA includes detailed estimates of repairs, replacement, and maintenance of system and equipment. It helps owners to understand the physical condition of the property and decide what repairs are needed on a priority basis.
Arrange capital budget. And understand, what is the best time for investing in repairs to maximize the property life? For the better life of a property hiring a professional construction service provider is important.
In addition to PCA, FCA identifies system deficiencies, property life, compatibility of contiguous systems, and total cost for maintenance and enhancing the property.
To summarize, FCA helps property managers to understand the current state of the building, predict future expenses and create an effective plan.
FCA is a living document and can be reviewed for a long period. It can be reviewed from time to time and updated as per the repairs done. On the contrary, PCA is a one-time document. It only inspects the current situation of the property and repairs needed. No future repairs or cost is estimated.
Both PCA and FCA identify the current physical condition of the property. PCA helps the investor in deciding whether investing in the property is profitable and FCA helps the property owner for valuing the property and enhancing its efficiency to maximize future profits. Now, as you are aware of the difference between a PCA and an FCA, you can confidently make a correct decision. Ensure what goals you want to achieve, and according to it, conduct a PCA or an FCA.
For conducting a proper FCA or a PCA, contact GW Partners. We are an experienced commercial real estate in Austin. We also offer construction management services and will properly plan out your PCA or FCA.