By Tina Howell,
Marketing Brand Manager at Partner Engineering and Science | Interview with Matthew Marcus
Matthew Marcus, Managing Director of Partner Engineering and Science Inc., recently presented at the Construction Lender Round Table (CLRM) to 230 construction lenders nationwide. His presentation was well-received, sparking a wave of follow-up questions from the construction lenders. In this interview, Mr. Marcus provides in-depth insights and practical tips for mitigating geotechnical risks in construction lending.
Q1. What are the key areas to review in a geotechnical report?
A1. When reviewing a report, consider the following key areas. First, I will examine the historic aerial photos and topographic maps in the report and online. Often, those included in the report are insufficient. Next, I check out the geologic map and USDA soil maps to get a picture of the predominant soil and geologic conditions, both in the report, if they are included, and online. I then review boring log and lab data, and compare them to what was expected on the site. Then, look for an executive summary and see if their assessment makes sense. While Partner’s geotechnical reports have an executive summary, many firms don’t include them in reports. In the event of no executive summary, then skim through as much as possible to look at the types of foundations required and the amount of subgrade preparation recommended, since those are the main results that impact the site.
Q2. When is a geotechnical report required for an existing building?
A2. Lenders are referring to a geotechnical report to evaluate risks, even though not required for every transaction. Here are cases where understanding the geotechnical condition helps with risk evaluation:
- For a rebuild or structural renovation, a geotechnical report is needed to get permits. If there is a use change, particularly a special use, a geotechnical engineer is often asked to check on the capacity of slabs and parking lots to make sure they can handle added traffic or loads, such as vehicle lifts, forklifts, heavy racking, loading docks, etc.
- If the report exists but was ordered by somebody else, many firms will opt for a peer review.
- For holds as investments or for low-leverage loans, it is recommended to add a geotechnical review to a property condition report. This can take the form of a visual pavement evaluation, slope evaluation, slab evaluation, retaining wall evaluation, or a geologic hazards review. Many investors also value separate specialty reports about soil/geologic conditions.
- For sites where there are specific issues of concern that may indicate serious structural issues, a forensic evaluation can discover the severity of the problems. The scope may include borings, scanning, coring, etc.
Q3. What is the protocol when adding additional stories to the existing 1-story building?
A3. Usually, the upper floor will need to be supported on new foundations unless the building was originally designed for a second floor and/or the building drawings and structural calculations are available. To support this, a new geotechnical report and on-site testing can verify the size and capacity of existing footings. Existing foundations sometimes can be augmented to provide the needed support when adding a mezzanine or adding capacity to the roof.
Q4. In addition to a geotechnical report, what other important documents issued by a geotechnical engineer related to building foundation should I look for?
A4. At the end of earthwork and prior to foundation installation, the geotechnical engineer should provide a pad certification letter, which will state that the foundation bearing soils were constructed appropriately per the geotechnical report. The engineer can certify the reinforced concrete upon completion of placement. If there were no geotechnical report, the engineer would not be able to do this. As such, he/she will have to evaluate and verify that the site will support the building properly. Establishing a paper trail is important, and it is not wise to close on a property without a sealed approval of the construction letter, including a field inspection with lots of photos from the geotechnical engineer.
Q5. What steps can you take to find out more about the foundation or slabs?
A5. The construction drawings and inspection reports should have all the information on the foundation or slabs. Lacking that, a geotechnical engineer can “pothole” the exterior of the building using a backhoe or vacuum truck to inspect the depth and size of foundations. Slabs can also be cored or scanned with ground penetrating radar (GPR) to estimate thickness, rebar placement, and compressive strength.
Q6. What are some of the red flags that have come up in a peer review?
A6. Here are some recurring examples of issues identified in peer reviews:
- A geotechnical report was prepared for the wrong property, resulting in a construction stoppage lasting several weeks while a new report with appropriate structural recommendations was obtained.
- Fault lines present on the property were not identified or addressed in the geotechnical report, posing significant safety and compliance risks.
- A geotechnical report recommended the removal of clays, but the inspection report showed clay left in place, which was signed off by the Engineer of Record.
Q7. When does a geotechnical engineer specify structural fill upfront?
A7. Geotechnical engineers typically aim to maximize the reuse of on-site materials whenever possible. Most soils can be used somewhere on the site if properly managed. However, structural fill may be specified upfront in areas with challenging conditions such as:
- Shallow groundwater
- Deep frost penetration
- Expansive clay soils
In regions like Texas or Colorado, engineers may recommend methods that allow contractors to reuse much of the clay material. In contrast, other locations may require removal and replacement of unsuitable soils to meet structural and safety requirements.
Q8. What does it mean when you see cracking in the drywall, and what should be done regarding the cracks?
A8. If cracking is happening at the joint between drywall panels, it is often due to fluctuations in temperature and humidity, causing expansion and contraction of the panels, which cracks the panel joint tape. However, more concerning signs include:
- Vertical displacement between adjacent panels
- Cracks running through panels
These may indicate structural distortion.
Cracks can also result from impact damage or seismic activity. If structural distortion is suspected, a structural and/or geotechnical engineer should investigate the underlying cause. As a general rule of thumb:
- Cracks on upper floors with no corresponding cracks on lower floors may suggest a structural issue.
- Cracks on the first level or repeated cracking in the same location across multiple floors may point to a geotechnical problem.
In conclusion, while geotechnical engineering is recognized as an essential step during new construction and major renovations, its role in diagnosing and resolving issues in existing buildings is underestimated. Subsurface conditions can change over time or may not have been adequately assessed during the original construction, leading to performance problems that manifest long after occupancy. Incorporating geotechnical evaluations into a building’s lifecycle, particularly during acquisitions, renovations, or when issues arise, enables lenders to better identify hidden risks and make informed decisions.
Tina Howell
Marketing Brand Manager at Partner Engineering and Science
Tina Howell is a highly effective marketing professional in the CRE industry who understands not only branding and communications but also the technical nuances of engineering and environmental science services. With more than 10 years of CRE industry experience, she is a liaison between technical teams and business stakeholders, ensuring that complex concepts — like geotechnical engineering risk, environmental due diligence, zoning report, or land surveying — are communicated clearly and persuasively to lenders, investors, and developers.
