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Washington, D.C.

Commercial real estate due diligence in Washington, D.C., involves a thorough and comprehensive process to ensure that potential buyers or investors understand all aspects of a property before completing a transaction. This process is essential in the D.C. market, which is known for its complex regulatory environment, historical significance, and unique market dynamics.

Partner Engineering and Science’s Washington, D.C. office and team have a rich history of working with area embassies, featuring PCA, Environmental, and Energy audits, frequently collaborating with the Department of Energy and Environment (DOEE).

Partner provides services for Phase I Environmental Site Assessments, Phase II Environmental testing, Property Condition Assessments, ADA Surveys, and Asbestos Surveys in support of commercial real estate transactions.

Solutions

Phase I Environmental Site Assessments

Partner is the national leader in Phase I Environmental Site Assessments by volume. Most reports are performed to meet the standards of ASTM E1527-21. Partner often customizes reports to meet individual client or agency lender's (Fannie Mae, Freddie Mac) requirements and understands the multiple counties and municipal regulatory bodies throughout District of Columbia.

Property Condition Assessments

In addition to providing Phase I ESAs, Partner provides Property Condition Assessments and Commercial Building Inspections for a wide variety of clients; including, CMBS lenders, Fannie Mae/Freddie Mac lenders, and equity clients. Most of our reports are performed to meet the standards set within ASTM E2018-08 guidelines.

Asbestos Survey

While conducting a Phase I ESA, Partner does a visual evaluation of accessible areas for the presence of Asbestos-Containing Materials (ACMs). Should it become evident that Asbestos-Containing Materials may be present, Partner can perform sampling and testing to evaluate if Asbestos-Containing Material is in fact present.

Phase II Environmental Testing

Partner performs Phase II Environmental Testing either in support of a financing decision or to meet the requirements of the Department of Energy and Environment (DOEE). Most of our reports are performed to meet the standards set by ASTM E1903-11. Partner understands the concerns unique to District of Columbia, such as historical industrial areas and high radon areas. The Partner Baltimore staff are also familiar with the widely variable geology across the state of District of Columbia, from the Atlantic Continental Shelf Province to Appalachian Plateaus.

Zoning and ALTA Land Surveys

Partner is a coordinator and preparer of ALTA/NSPS Surveys, Boundary Surveys, Topographic Surveys, and Zoning Reports across the United States for use in commercial transactions. We effectively handle and facilitate the coordination of land surveyors, title, ordering, process, product, and delivery. We manage the entire process of acquiring your survey and can effectively manage single-site or multi-site transactions. Our extensive network allows us the flexibility to provide a registered professional land surveyor for any site location—nationwide—with competitive pricing. We will coordinate all questions and comments from all transaction parties with the site surveyor and furnish reliable timely surveys all from one point of contact. A zoning report is a necessary part of many real property transactions because the current owner is responsible for existing zoning violations. Partner’s Zoning Reports take usage regulations, Baltimore and municipality provisions into consideration as well as other regulations; such as the Americans with Disabilities Act.

Accessibility & ADA Surveys

An Accessibility Review is an evaluation of a property’s compliance with applicable federal, state, and local accessibility regulations. The Americans with Disabilities Act (ADA) is a federal regulation that was passed in 1990 with no “grandfathering” clause for older facilities. Other state and local building accessibility codes also apply.

Frequently Asked Questions

What are the key areas of focus for due diligence in D.C. commercial real estate?

Legal: Verifying clear title, ensuring compliance with zoning regulations, and reviewing leases are crucial.
Financial: Analyzing income statements, expenses, and historical financials of the property is essential for understanding profitability.
Physical: A thorough property inspection to identify any structural or environmental issues is key.

What documents are typically reviewed during due diligence in D.C.?

Title reports
Property surveys
Leases and tenant information
Tax bills and utility bills
Service contracts and warranties
Environmental reports (if applicable)

What professionals should I involve in the due diligence process?

It's advisable to engage a team of professionals including attorneys, real estate agents, appraisers, environmental consultants, engineers, and financial advisors to conduct a comprehensive due diligence review.

What is the property's flood risk and insurance requirements?

Consulting FEMA flood maps and understanding the property's flood zone designation will help determine insurance requirements and potential flood mitigation measures.

Are there any historic preservation or landmark designations?

Properties in historic districts or with landmark designations may face additional restrictions and requirements for renovations or alterations.

Digging Deeper

District of Columbus Experience

Commercial real estate due diligence typically involves a comprehensive review and analysis of a property before acquisition or investment. This process aims to identify any potential risks, issues, or liabilities associated with the property.

With it’s unique regulatory environment, Washington, D.C. has a complex regulatory environment for commercial real estate. It’s recommended to involve legal counsel familiar with D.C. real estate regulations. Additionally, many areas in D.C. have historic preservation requirements that could impact renovations or development plans.

Assess the local community’s community and economic conditions, including employment rates, major employers, and economic development plans that may influence property value and demand.

Some key aspects of commercial real estate due diligence include:

Title Review: Examining the property’s ownership history, encumbrances, easements, and any legal issues that could affect the title.
Environmental Assessment: Evaluating the property for potential environmental concerns, such as soil contamination, asbestos, or other hazardous materials.
Zoning and Land Use Review: Ensuring compliance with local zoning regulations, building codes, and permitted uses.
Physical Inspection: Conducting a thorough inspection of the property’s condition, including structural integrity, mechanical systems, and any necessary repairs or renovations.
Lease Review: Analyzing existing leases, tenant profiles, rental rates, and occupancy levels.
Financial Analysis: Reviewing the property’s income and expense statements, projected cash flows, and potential for future appreciation or depreciation.
Market Analysis: Assessing the local real estate market conditions, competition, and potential demand for the property.

Talk to a Human

Bill Whitty, Jr.

Relationship Manager

+1 202-600-7756

[email protected]

Washington D.C., DC, USA

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