Buying a Commercial Building: Inspection Tips
So you think you have finally found the right commercial building for your business. And you’re convinced that it will meet your needs and permit you to assure the future of your business. Before jumping into the purchase process, however, the Business Development Bank of Canada (BDC) maintains it is vitally important to avoid unpleasant surprises by performing due diligence. In this context, the inspection of a commercial building is highly beneficial and could have a significant impact on your business decisions.
Why have a commercial inspection done?
Although it is important to choose a commercial building based on factors such as location, available equipment, and zoning, it is equally important to have the building condition assessed in order to learn about necessary renovations and maintenance to be scheduled .
The pre-purchase inspection of the building is the best way to discover this information.
At Genispec Inspections, commercial building inspection includes all of these elements:
- Building envelope (building facades)
- Structure and exposed parts of foundations
- Underground parking garage
- Mechanical systems
- Electrical systems
- Fire safety and prevention systems
- Plumbing systems
All this, in order to provide you with the best information about the actual condition of the building. What’s more, every inspection report submitted by our inspectors is tailored to the requirements of financial institutions for the purchase or refinancing of your commercial building. The inspection results provided in our reports can have an impact on your company’s business activities as well as on operating costs.
Commercial building inspection could influence your purchase offer
If the pre-purchase inspection of the commercial building you’re hoping to buy reveals a major weakness or flaw, you can then evaluate whether it is better to cancel the transaction or to negotiate with the seller. In both cases, you will avoid significant expenses because, by negotiating with the seller, you can reduce the amount of your offer to purchase and/or require the seller to solve the problem.
Commercial building inspection could inform your business strategy
With the inspection report in hand, you will be better able to forecast which renovations need to be done and you will be able to modify your projects in accordance with the inspector’s recommendations. This will ensure that building renovations will not hinder the smooth running of your business. Without an inspection report, you risk encountering unforeseen problems that could delay some of your business operations and adversely affect your strategy.
Commercial building inspection helps you predict maintenance costs
The inspection report also serves as a maintenance guide. This enables you to adequately plan your maintenance budget and to maintain the building in good condition.
Commercial building inspection enables you to ensure safety
Since certain structural deficiencies could be dangerous for your employees or visitors, knowing the condition of the building means that you will be able to reduce risks and/or prevent accidents by completing corrective work. As an example, the evaluation of electrical circuits could greatly reduce the risk of fire.
Commercial building inspection is an essential element of due diligence
During the due diligence process, which also includes the evaluation of several less tangible aspects, the inspection of a commercial building provides a thorough assessment of the condition of the building’s materials and components. Among the non-material aspects to be evaluated are the history of the property in order to be aware of all the liens and obligations attached to it; the security of the income stream from one or more tenants, including a study of their credit histories and payment habits; the insurance policy to see if any claims for damages have been filed, indicating possible construction defects.
Now that you have a better understanding of how an inspection fits into the due diligence process when you’re buying a commercial building, you will also understand the importance of using professional inspection services and following their advice.
Genispec Inspections inspectors specialize in the inspection of:
- Industrial buildings
- Commercial or semi-commercial buildings
- Hotels and motels
- Multi-unit apartment buildings
By entrusting your commercial building inspection to us you will be protected against numerous contingencies. As a result, you will be free to focus on developing your business, so contact us without delay.