The Importance of Commercial Building Inspections

The Importance of Commercial Building Inspections

Robert S. Michaud, P.E.

For anyone who has purchased a home, especially when using a loan from a bank or other financial institution, you know that a pre-purchase home inspection is almost always required. So why is this not the case with commercial real estate transactions? They may not be required by lenders but that doesn’t mean you shouldn’t consider having one performed. In fact, it may be the single most important act you perform prior to signing for the new property. Let’s examine why that is the case.

Commercial real estate is, by definition, about business – commerce. All businesses must focus on profitability, which means the income must exceed the out-go. Buildings are necessary for many of our business functions, and while their long term value is typically considered an asset, their day to day operation involves expenses. When considering the purchase or lease of a new commercial property, it is critical that the purchaser or lessee have a firm understanding of what the capital and operating expenses might be. You wouldn’t purchase a home with a leaky roof or a faulty boiler, so why would you blindly purchase a building for your business without the same basic level of understanding about the building? In fact, if you select the right inspection company, you can learn much more about the property, such as energy usage projections and equipment lifecycle expectations, and that can help you make the best informed decision possible.

Commercial building purchases or long term lease agreements are, or should be, logical and economic decisions and the tend to be, less about emotion than a residential real estate transaction. While in both cases things like location and aesthetics are important, commercial real estate transactions are fundamentally more concerned with how the purchase or lease will help the business grow. To that end, a detailed analysis of the attributes and faults of the building should be seen as a way to determine whether or not it will fulfill the needs of the company rather than more subjective concerns.

Another reason that conducting a building inspection prior to purchasing or leasing a commercial property is so important is due to the complexity of commercial building systems as compared to residential ones. While some home buyers will feel very comfortable taking on home improvement “D.I.Y.” projects, the equipment and systems found in commercial buildings is often much more complex and unfamiliar. Additionally, you are in the business of running your business, not acting as a carpenter, electrician or HVAC technician typically. Still, you need a qualified professional to analyze these systems and provide you with easy to understand reports that allow you to manage the building that you choose to lease or purchase. Armed with a quality inspection report, you can properly plan for the required maintenance and upgrades that you will need for your building.

One more consideration for commercial buildings that should not be overlooked is that they are typically subject to very different regulations compared to residential buildings. Things like the Americans With Disabilities Act, along with local, state, and federal building code requirements must be considered and understood as they can have a direct impact on the final cost of the building. A qualified inspector with experience inspecting commercial buildings can identify these for you and help you understand the potential costs involved. Failure to take this into consideration could be extremely costly. For instance, perhaps you are considering the purchase of a building that had not been used for retail purposes in the past, but is in a great location and has great “curb appeal” – a real eye catcher that you hope will draw in customers. Unfortunately, the primary entrance is up a short flight of stairs and leads to an ornate old door with an old fashioned knob for hardware. You may be forced to make significant changes to the entrance to allow for ramp access and a change in the front door to make it ADA accessible. These changes may or may not effect your decision to purchase the property, but you deserve to have the information in advance so that you can weigh the pro’s and con’s before making your decision.

Now that you know why you should have a building inspection performed before leasing or purchasing a commercial building, the next question is how do you go about it. First, talk with your real estate agent about your interest in finding a qualified inspection company to review the building. You can also conduct your own search in your area. Be careful to select a consulting firm or inspection company that has experience specifically in the inspection of commercial buildings. As noted earlier, commercial buildings are often significantly different from residential structures and your average home inspector is not equipped to provide you with the analysis that you need to make your decision. Realtors – if your business lists or assists buyers in the purchase of commercial buildings, seek out those firms in your area that can provide these services and have experience in this area. You will be providing a valuable service to your clients and in the process of helping them make financially sound choices, you will be improving your credibility in this market.

Building inspections are a vital service to the building owner and their importance is not limited to just the initial transaction. There is valuable information for all building owners and managers that can only be gained through periodic inspections. Even after the real estate transaction is over, consider periodic inspections as part of your ongoing maintenance and operations process. These inspections will help you keep track of improvements that have been made to the building as well as to re-assess the condition of the systems to plan for future work and upgrades. It is far more cost effective to plan for maintenance and capital improvements to your facility than it is to wait for a system to fail and then have to deal with repairs on an emergency basis. “An ounce of prevention is worth a pound of cure” – this axiom from Ben Franklin is as true today as it was in his day. Find your qualified building inspector and help prevent unwanted problems in your building.

© Michaud Engineering Inc. 2020

We Are Really Fortunate

We Are Really Fortunate

Robert S. Michaud, P.E. - 5/5/2020

We are really fortunate. Can you imagine if we tried to manage this same pandemic 20 or 30 (or more) years ago? Not only would we all be a lot more starved for entertainment options (no Netflix, Amazon Prime Video, Hulu, etc.), but we would certainly not have the same opportunity to still be productive at work. For those of us with “essential business” status, part of our challenge has been to adapt to the very different business climate. We have gotten used to video conference calls and virtual meetings, but have we really explored what can be done “virtually” in our workplace. So much of what we, as engineers, do each day revolves around information and data. If we can transmit that data to others electronically, we can find ways to continue to work collaboratively. If you aren’t permitted to allow a contractor or consultant onto your property to investigate or inspect an issue, take photos and video or conduct a video call (Skype or similar) with the consultant on the line. We can find ways to work together and still get the job done.

Time is critical. Each day of this pandemic is troublesome for normal operations, but it can also be a time to address those areas of our facilities that too often get neglected. This is a perfect time to conduct those roof inspections, equipment inspections, general building inspections, audits of the maintenance practices, evaluate and update current maintenance procedures, develop maintenance procedures for those troublesome pieces of equipment that always seem to slip through the cracks, and in general, streamline operations. Having a hard time wrapping your head around these things? Reach out for help. There are resources and experts ready to help, and with today’s technology, we can tackle these challenges in a variety of new ways.

Now, try to think about doing THAT a few decades ago!

© Michaud Engineering Inc. 2020

Inspections to Establish a Baseline Condition Report

Inspections to Establish a Baseline Condition Report

Robert S. Michaud, P.E.

April 30, 2020

One of the most important, yet often overlooked, reasons for building and/or site inspections is to establish a baseline report of the condition of those assets at a particular point in time. This can be extremely useful to various interested parties for a number of reasons. They include:

• Building owners: Baseline information gives them a starting point for their capital and maintenance planning
• Maintenance managers: It provides them with important information on the current state of the site and building and their current needs. It also gives them data that can be used to begin prioritizing their maintenance approach.
• Building occupants / tenants: It provides them with key information about the building and its equipment that can be used to negotiate with the building owners for the purposes of planning and determining responsibility. For instance, if a problem is noticed by the building owner at some point in the future, but the tenant can show that it had been identified at the time of the baseline inspection, the responsibility for correcting the problem may change.
• Maintenance service providers: Similar to the case for maintenance managers and tenants – it allows them to develop a road map and a plan to provide prioritized, effective service to their clients while at the same time, protecting them from blame in the case of pre-existing conditions.

After determining “why” you should conduct a baseline inspection, the next question to ask is “how”. There are a few facets to this answer.

The first consideration is who should conduct the inspection. The best answer is a disinterested third party – specifically a qualified inspector with the requisite experience to provide a thorough analysis of the buildings and / or site, but does not have a stake in the outcome of the inspection. This firm or individual should not have ties to the client or other interested party, nor to a contractor or other firm that may benefit by way of future contracts as a result of the findings.

Next is the level of detail required for this baseline report. This really depends on the client and the intended use of the data in the future. If the primary need for the baseline is to simply establish a “snapshot” of the facility, site and equipment at the time of the inspection, then a basic inspection with photographs, annotated floor plans, and a narrative descriptive report of the conditions observed would be sufficient. On the other hand, if this report is going to be used to prioritize maintenance efforts and capital replacement spending, then a more thorough and detailed facilities condition assessment may be in order. This condition assessment would include estimated values of the various building components and systems along with estimated costs for correcting problems found during the inspection.

The above paragraphs cover the topics of “who”, “how”, “why”, and “what” baseline inspections are, so the last item to be covered is “when”. This is an extremely important consideration as well, and to a certain extent, it depends on “who” is calling for the inspection. For building owners and facilities maintenance managers, the answer should be – as soon as possible. The sooner this data can be collected, the sooner a plan of action can be established to address any problems found. In the case of a tenant or facilities maintenance service provider, the best answer is before move in or the start of contracted services. This baseline will provide the cleanest look into the conditions at the facility before the introduction of the new party. Having said that, it can still be performed later, but the benefits are not as great as having that “clean slate” to start with at the beginning of a contract or lease.

Robert S. Michaud, P.E. is a licensed engineer in three states and has been providing detailed building inspections for over 15 years.

© Michaud Engineering Inc. 2020

Thinking Outside The Box

Thinking Outside the Box

4/20/20

We are deep into the second month of coping with the COVID-19 virus.  This has forced drastic adjustments by government, business and individuals as we do our best to cope with it.  Some businesses have been forced to cease operations entirely, while others seek to offer new goods and services in response to changing needs in the marketplace.  Still others that produce essential goods are moving forward but adjusting its business practices to protect the health and welfare of its employees and customers.  It can seem very overwhelming at times to deal with new restrictions on business practices, often to the point of thinking that nearly nothing can be done until this pandemic has past.  That may not be the case, however.

The phrase "think outside the box" has become cliché, but the concept has never been more appropriate.  Students are adjusting to "distance learning" at home via teleconferences with their teachers and professors.  Likewise, many businesses have found that meetings that used to be held in person could be performed online.  Maybe the solution isn't quite as good as actually being together in person, but it *can* be and *is* being done.  

Many contracted engineering services can be done in the same fashion.  Michaud Engineering provides a wide range of engineering consulting services, many of which can be done remotely with a little "thinking outside the box".  For instance, this is a great time to evaluate the status of your maintenance program.  How is it performing?  Are failure rates being reduced due effective preventive and predictive maintenance methods?  If not, why?  Is your current process more of a work order tracking system rather than a true maintenance program where preventive and predictive maintenance tools are utilized to improve reliability and reduce cost?  These are all examples of services that can be performed remotely without having to worry about on-site visits, PPE, social distancing protocols, etc.  This is also an ideal time to take a closer look at the practices and procedures of your maintenance program to find where its strengths and weaknesses are.  If you haven't really implemented a maintenance program yet, this would be an ideal time to do so.  Using tools that we are already familiar with - the phone and the computer - tackling these programs now means that your company will be better prepared to resume normal operations when we beat this virus.  

© Michaud Engineering Inc. 2020

Chaos and Opportunity

Chaos and Opportunity

3/27/20

At the time of this writing, we are all dealing with various forms of  "sheltering in-place" and "stay at home" orders from federal, state and local authorities as we collectively try to staunch the expansion of the COVID-19 virus.  We are not really sure how long this will last, but we know at some point, we will be getting back to work in our regular work places, doing our jobs the way we used to (perhaps with some modifications with the lessons learned from this situation).  Many of us have had experience in the past working with different tools to facilitate communication 'virtually', but few have had the chance to put them in practice the way have been forced to recently.

It isn't easy making these sorts of adjustments, but adjust we must.  In the beginning of this quarantine period, many people spent the majority of their time just trying to get their footing, so to speak - adapt to working from home, getting more familiar with the tools at their disposal, and trying to make sense of the current workload.

We should have reached somewhat of a steady-state by now and there are undoubtedly some tasks that are starting to become more "routine".  Effectiveness and efficiency in our new processes is important because it allows us to be productive.  Now is the time to get even more creative.  Looking ahead, to the time when you will be getting back to your regular routine at your workplace, ask yourself:  What are those things that are going to consume my focus as we get back up to speed?  What can I do now to NOW to make that process easier?  What sort of things to I have the opportunity to address NOW that I am away from the normal day to day distractions?  You may find that in this time of chaos there are opportunities for you to dig into problems and address concerns that you simply didn't have the time or resources to do before.  Now that you have been working from home for a while and you have cleaned out the garage or the closet that has been bugging you, what sort of things have you been neglecting at work that you could now get done remotely? 

Perhaps you don't have the time or expertise to address these things personally, but there is a good chance that there may be resources that available to help you with them.  Contractors, engineering firms, consulting firms and others are all re-adjusting their work load just as you are. This may be the perfect time to engage them to get these things done.  By so doing, you will also strengthen that corporate relationship and you may find long term benefits from the effort. 

We all have to respect the requirements to knock back this virus, but that could actually lead to some positive opportunities.   Give it a try.

© Michaud Engineering Inc. 2020

The Hidden Electrical Panel

The Hidden Electrical Panel

3/26/20

One gets to see all manner of things when you spend your time performing building inspections.  That was, in fact, one of the inspirations for this series of publications.  The hope is that by highlighting some of these issues, you can take a more critical look at the buildings in your portfolio and improve the way they are maintained.  It is fitting, as we work through the COVID-19 virus and re-evaluate how we conduct ourselves with respect to personal hygiene and spacing to prevent the spread of this disease, that we take a moment to also re-think our buildings and perhaps not ignore those things that "have always been that way" because some of those situations can lead to truly disastrous problems if not addressed.

Case in point:  what is wrong with this picture?  Most, if not all of you, already know.  Not only is it against code to have anything stored within 36" of an electrical panel, but stacking flammable materials this close to panel or switchgear is just asking for trouble!  Yet, of all of the problems observed in building, this (or a variation of it) is probably the most common.  Why do we do it?  Sometimes it is laziness.  Sometimes our buildings are built with a lack of proper storage space, or that storage space is already full.  Sometimes we tell ourselves that it is "just temporary" until we get those filters where they need to go.  NONE of those would be acceptable answers of the fire marshal showed up for a pop inspection though, and we know it. 

While we all know this is wrong and against NEC code, we continue to do so, often because we have been able to "get away with it" for so long in the past.  We fool ourselves into thinking that it can't be that bad because it has been that way for years, and I really don't have any other place to put that stuff anyway.  However, just as we are re-evaluating some of the social interactions that we are having to limit to prevent the spread of this virus, we now have to recognize that even though something doesn't appear to be likely, if the potential for serious harm is high, we need to take the threat seriously.

Years ago, while managing a group of buildings nearby, we contracted a well known, national electrical contractor to perform some much needed / overdue preventive maintenance and service to our electrical switchgear.  In watching the contractor go about his work, I was impressed by his commitment to safety.  This was 1999, but he was wearing full arc-flash rated clothing and face protection, he made sure the work area was clear of obstructions and debris, and he made sure I was at a safe distance before he began his work, among other things.  At the end of one work day, I complimented him on his commitment to safety.  He shared that he hadn't always been so cautious, but that the year prior, he lost a friend to a workplace accident involving arc-flash.  They were leaving the work site and his co-worker noticed an unsecured panel on an overhead buss duct.  They were in their street clothes, but his friend thought he could take the minute or two to re-secure the loose panel on their way out of the facility.  He was wrong, and the arc-flash that caught him ignited his non-rated clothing.  He died two weeks later from the burns he sustained. 

I share that story because it is directly related to the picture above.  While that isn't a person standing in front of those panels, but it is certainly combustible material, and an arc-flash here could ignite those boxes and potentially the entire building. 

This problem was addressed immediately when pointed out to the appropriate facilities maintenance personnel.  How many times, though, have we seen the same or similar problems in our facilities?  Electrical panels with cleaning supplies stored in front of them.  Electrical panels with water lines that have been routed over them.  Unsecured electrical panels in public spaces (especially in schools were children can access them).  Too often, we walk right by these things because we don't really "see" them - they have become the background 'noise' of our environment.  Let's take a moment and add this to our 'to-do' list and clean this stuff up.  The building you save may be your own.

© Michaud Engineering Inc. 2020

Challenge Issued

Telecommuting.  Distance working.  Remote access.  Skype.  WebEX.  MS Teams. Google Hangouts.

We have been using these tools and these buzzwords in business for years now, and for some of us, they are actually regular parts of our everyday work.  Others have heard of them and perhaps used them from time to time, but are not as familiar with them.

The time is NOW to take what we have learned and leverage these tools in this most unusual of circumstances that we find ourselves in.  As I write this, we are a little over a week into a sort of soft lock-down of "self-quarantine" and maintaining proper "social distancing" as we try to beat back the Covid-19 virus.  All indications are that we have weeks more to go before we are out of the woods on this.  There are only so many re-runs to watch.  We are driven, productive, business oriented people with a nagging voice in the back of our head saying "Do Something!".  In addition to that, we likely have businesses that face uncertain futures, employees and family members that are relying on us.  Do something indeed!  Now is the time for action.

With the restrictions put upon us by prudence and the government, we are limited in some ways with what we can do, but there are still opportunities to be productive and move the business forward.  All those buzzwords you have heard, those social media and networking tools that you have dabbled with in the past, now is the time to transform them into truly useful business tools.  We can find ways to get work done in virtual spaces, using the very powerful communication tools at our disposal.  Many of us work with data and information as our core stock and trade, so lets continue to do that.  Let's find ways to meet our client's needs even when we can't meet with them face to face.  Let's work on those items on the "To Do" list that we always talk about getting around to doing, but never seem to find the time.

We are living in extraordinary times and it will take some extraordinary thinking to work our way out of this.  However, we have have been blessed to have this crisis hit us at a time when we have more tools and resources at our disposal than ever before.  Let's take this opportunity to re-evaluate what CAN be done and not focus on what we are prevented from doing.  Those companies that can effectively leverage their available resources will come out of this situation stronger for it.  Let's see if there are ways in which we can help our fellow families, employees and companies stay engaged and productive even if the office we are working in looks a bit different.

This is the challenge that has been laid at our feet.  Let us together meet this challenge and through creativity, find ways to help each other be successful.

© Michaud Engineering Inc. 2020