Got undetected moisture? When moisture is present for months and sometimes years, mold growth is common. Undetected water intrusion and mold growth can be a deal breaker. The project now needs major renovations, not a minor remodel, depending on the severity of the damaged building materials and the location of the active leaks. Tenants must move out temporarily for repair work and cash flow plummets. Imagine learning a potential multi-family apartment complex at 95% occupancy has previously undetected interior and exterior building damage due to a hurricane. It happens. Common in inland tropical and coastal areas, storm damage wreaks havoc in older commercial and multi-family apartment buildings.
As a native Floridian and former Realtor, I have been through my share of hurricanes and seen the destruction possible. Since Charley in ’04, any building that I would consider investing in requires a detailed inspection by a professional with experience in construction. I’ve seen oak trees penetrate roofs and shear balconies. I’ve watched the shingles blow off, one-by-one, and I have withdrawn listings to re-roof properties that were on the market when a major storm passed through towns in Florida. But what happens when water damages a structure and its building materials, but it isn’t obvious?
Some buildings secretly deteriorate while others are maintained properly with regular building inspections or PCAs. Here is a true story about a building that was lucky not to have been crushed by mature flying oak trees, but not lucky enough to escape the wrath of a hurricane.
About a year after Hurricane Charley popped old oak trees, roots and all, up and out of the saturated ground, I notified property managers of mold growth discovered beneath a carpet in an old apartment building. Knowing the exterior wall had taken a pounding by sustained rain and wind gusts between 75-100 miles per hour during the hurricane, when I spotted the dark spots that had previously been covered by a bed, I took a closer look at the wall abutting the carpet and baseboard.
That’s when I discovered pockets of water behind the wall’s paint, soft baseboards, and black mold growing for several feet along the edge of the carpeting. Immediately, I called the property management staff and reported the wet wall and carpet, knowing it could become a health hazard and air quality issue. When asked about repairs, a few days later, the property manager informed me that a new tenant had already moved into the apartment. I asked about the wall repair and carpet replacement and this is what I was told by a professional property manager.
“The new tenant didn’t see any problem with the wall or the carpet,” she said.
I left that complex wondering how many other apartments had undetected storm damage and significant mold growth since Hurricane Charley. It had already been a year since the hurricane tore through Orlando, Florida. A Property Condition Assessment certainly would have revealed how many of the ten apartment buildings and units had undetected water intrusion damage to interior walls, flooring, and carpeting of the buildings owned by this national multi-family chain.
Property Condition Assessments Are Not Just For Savvy Investors
Savvy investors know how valuable a Property Condition Assessment is and they periodically order PCAs for portfolio properties, but PCAs are not just for savvy investors. Beware of moist building materials and consider ordering an inspection, especially if older buildings experienced major storms since the last inspection. Coastal and tropical areas often experience high winds and pounding rain capable of exposing construction flaws like missing drainage planes from Exterior Insulations and Finish Systems (EIFS). CBC noted this condition in one inspection of a warehouse in Arkansas. Property management staff did not know the source of the water leak, but were aware of the persistent problem. When this happens, a Forensic Inspection to investigate the source before repairs is needed. To learn more about Forensic Inspections, if you suspect water intrusion, roof, leaks, or possible mold growth, please see:
The Centers for Disease Control (CDC)
For those who did not read my post last week, the Centers for Disease Control recommends that all building owners conduct regular inspections and carefully maintain HVAC systems. The CDC states this in its National Institute of Occupational Safety and Health, NIOSH Alert No. 2013-102. Please download the NIOSH Alert:
Need a Property Condition Assessment?
With headquarters located minutes from Orlando International Airport, CBC conducts commercial building inspections nationwide. Cities served in the recent past include: Orlando, Winter Park, Miami, Tampa, Atlanta, Charleston, St. Louis, and San Francisco. Greg Trotter conducts Property Condition Assessments and manages multiple construction monitoring projects, among other services. Services offered by the boutique commercial real estate consulting company include project oversight for historic renovations, bank draw monitoring, construction estimates, cost-to-completion analyses, phase one environmental site assessments, building energy performance assessments, forensic inspections, and storm water, erosion, and sedimentation control inspections.
I’ll discuss how much a property condition assessment costs in my next post. Please check back for more commercial real estate investment information and news soon.