Call Us: (800) 419-4923
 Call Us: +44 (0)20 3865 7701
 Call Us: (787) 822-8377
 Call Us: (437) 855-4925
Partner Engineering and Science, Inc.
Partner Engineering and Science, Inc.
You are here: Home » Resources » Articles » Property Condition Reports: What Do Investors Need?

March 14, 2016

Property Condition Reports: What Do Investors Need?

By Partner ESI

THE SCOPE OF WORK FOR THE PROPERTY CONDITION REPORT CAN VARY WIDELY DEPENDING ON THE USER’S GOALS

The Property Condition Report is a frequently used due diligence tool in commercial real estate, but the scope of work can vary widely depending on the purpose. The baseline standard for conducting a Property Condition Report is the ASTM E2018-08 “Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process“. This standard defines the consultant’s and user’s responsibilities for creating a report documenting the physical condition for a property involved in a real estate transaction. It is used in both debt and equity deals.

Debt vs Equity Property Condition Reports

There is typically a difference in the Property Condition Reports issued for these two transaction types and it is based on how the user will rely on the report. Debt transactions need a discussion of current property conditions and projection of costs over time for maintaining the improvement. Acquisitions have the same concern, but may need more detailed analysis to confirm the conditions and to address specific risks that the user has because of its position of ownership.

Users/clients for an acquisition report can include:

  • Institutional – Pension Funds, Pension Fund Advisors, Attorneys
  • Private Investor – Developers, Brokers, Lenders, Attorneys
  • REITs

The equity Property Condition Report serves the following functions:

  • A recording of property conditions for a buyer at some level of detail often specified by the buyer
  • An independent evaluation of conditions, not dependent on the viewpoint of the current owner
  • A forward view of what could go wrong
  • A negotiation tool

Continue reading the GlobeSt blog here.

Other Resources You Might Like


Let us be your Partner

Learn how we can support your next project or share insights via our newsletter.
Terms and Conditions  |  Privacy Policy   |  Website Terms of Use  |  © 2025 Partner ESI. All rights reserved.
crossmenuarrow-up linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram