Some commercial building owners, when seeking to sell a property, erroneously believe that any underlying structural issues with the property are issues best left for the next
owner to address. Unfortunately, for commercial mortgage brokers and lenders, that approach can significantly
complicate and, in some cases, stall transactions.
If a broker is aware of a structural issue with a property they are representing, they have a responsibility to
make sure it gets addressed, thereby reducing liability
for lenders and future owners. When looking to stave
off the most expensive structural damage down the
line, ongoing inspections and small corrections should
focus on building enclosures, including roofs, exterior
openings and facades; exterior stairs and balconies;
general building structure; and parking garages.
The most common issues affecting these building
components are structural integrity, water intrusion,
steel corrosion with section loss and deterioration of
materials. Inspecting these important elements regularly to ensure they are not compromised can make
the difference between a structural issue remaining
small and correctable with a manageable repair, and
having it deteriorate to the point where a structure has
to be rebuilt entirely. Deals that involve significant
remediation or structural mitigation cost more, are
more difficult to broker and carry far more risk.
Following is an overview of some potential building-structure red flags that every commercial real estate
stakeholder, including commercial mortgage brokers,
should be on top of before any property deal pro-gresses too far toward closing.
Roofs and exterior openings
With any building, it’s wise to examine wood soffits
(such as overhanging roof eaves) for any suspected
microbial growth. Water damage on porches may indicate
a leak from an overhanging roof. Leaks are not always
directly noticeable unless roof shingles are missing.
Damage to breezeways, balconies or wood trusses also
are indicators that something is wrong with the roof.
With respect to exterior openings, carefully and
regularly examine trim work around doors and windows, and around the edges of balconies. If wood is
not sealed properly, small cracks and deterioration can
allow water inside the structure, particularly in tropical
areas, or when wind-driven rain occurs.
As buildings are upgraded and maintained, these
areas are often painted over to hide small blemishes.
If you don’t really look for it, you can miss these crucial
details. Also, maintain proper sealants around doors and
windows — particularly the framework where doors and
windows come together — and around skylights.
Facades are usually composed of stucco, brick or concrete tilt-up walls, but the most common is the brick
facade. If brick ties are corroded by water, it could cause
a shifting in the facade, even if the main structure is OK.
Bricks also can suffer damage from thermal expansion because of extreme heat and cold, given
brick material can expand and contract. This can
cause cracks that let moisture in via rain or humidity,
structural deterioration or mold. At the base of brick
walls, there are weep holes that allow for moisture
to leave the structure. People often incorrectly seal
these because they fear bugs or critters will get in.
The mortar between bricks also can deteriorate. If
some of it is missing, flakes or crumbles, repoint with
Jane Powell is a project manager at Partner Engineering
and Science Inc. and a registered professional engineer in
Texas specializing in structural forensics. Her experience
encompasses commercial, industrial, governmental and
residential projects, including historically registered buildings.
Powell also is an expert in emergency-response assessments
and remedial-repair recommendations for distressed and/
or damaged structures. She earned both a bachelor’s and
master’s degree in civil engineering from the University of
Houston. Reach Powell at email@example.com.
Don’t Let Property Red Flags Derail a Deal
Proactive due diligence and inspections help to minimize structural risks
By Jane Powell
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