What role do you think property condition assessments (PCAs) play in the recovery of the market?
According to Bill Tryon, director of technical quality at GRS Group:
“PCAs are more important than ever. In the market downturn, many property owners deferred major maintenance and replacements, which can significantly impact the value and cash-flow of properties.”
Confidence is returning to the market causing more buyers and lenders to step up their game and focus some attention on neglected properties that have had little to no activity over the past few years. Potential investors are paying closer attention to environmental due diligence amid the high risk aversion that still exists in the market and buyers want to avoid getting caught up in a deal where a property has issues that may cause devaluation. As a result of these factors, PCAs are playing a more crucial role in due diligence as a way to identify any material, structural issues, as well as augment the property appraisal process.
PCAs are important for financial institutions, as well. Mike Kulka, P.E., founder and CEO of PM Environmental stated that "over the next few years, more financial institutions could adopt PCAs as a standard part of property assessments." According to Kulka, in a recent panel including environmental risk managers and appraisal professionals, "three large banks all stated they see great value in PCAs and see this as a growing area in the due diligence group at their institutions."
Now, here are a few questions for you:
1. Do you believe that PCAs hold value in the property assessment market?
2. What variables affect the cost and turnaround time of a PCA?
3. Have you seen more PCA work coming down the pipeline for your firm lately?
4. Will PCAs continue to be relevant further into recovery, and if so, are they more likely to be bundled with Phase I ESAs?
Sean Dundon of Blackstone Consulting, David Drummond of Key Bank, Mike Kulka of PM Environmental and Bill Tryon of GRS Group weighed on the questions above and shared more insights on the role that PCAs play in the recovery, the value of PCAs and whether bundling PCAs with Phase I ESAs creates a competitive advantage.
You can continue reading this EDR Insight article to see what they had to say.