When is a dollar not just a dollar?
Have you ever engaged a Property Condition Assessment (PCA) consultant to evaluate a core or core-plus property under contract, then shuddered when you received a comprehensive report which provided a lengthy list of capital, deferred maintenance and property defects seemingly above your pro forma assumptions? Or perhaps worse, placed a value-add property under contract, but then engaged a PCA consultant whose resulting report suggested they might have had blinders on during their evaluation of the property?
An equity PCA is a flexible document that is prepared by a knowledgeable due diligence professional for the sole purpose of providing the necessary insight to the client regarding the physical condition of the property, so that the appropriate risk-adjusted returns can be determined. In reality however, the property condition report is often used as a reference document for several other direct or indirect stakeholders that may be involved in a given transaction, and PCA providers are often requested to provide reliance to other entities after submission of their report to the client.
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Marc Bourdages
