April 30, 2022

How to evaluate an existing building

You know now how to inspect an empty plot, but what should you look out for when there is a building on your plot? Maybe your company is thinking about a conversion, or demolishing it. That usually depends on the state of the building, so let me explain to you how to inspect an existing building.

Summary

  • Zoning plan
  • Soil survey
  • Aerial Photos
  • Ordnance suspicion area
  • Existing connections and cables on the plot
  • Existing drawings
  • Location
  • Borders
  • Trees and bushes
  • Debris
  • Land register excerpt

What should we check Before inspecting the building?

Don’t go into the first site visit without being prepared. There is a great deal of information that can help you detect some of the risks.

Zoning plan

Just as with the plot, you need to check the zoning plan. Does it give you permission to operate your kind of business from that location? If you’re not sure, ask for external help in the form of an architect to help you read the zoning plans.

Permit requirements

In Germany you almost always need a full permit or a change-of-use permit for your construction projects. Only under certain specific circumstances may you be exempted from a building permit. I’ll explain the exact details in a separate blog post.

As-Build drawings

Have the owner or broker send you the designs of the building, including the most important designs, permit designs, structural designs, architectural detailed designs, HVAC designs (heating-, ventilation-, air conditioning) and electrical plans.

Documents concerning the surrounding plot

If the building comes with a big surrounding plot, then you would also need the documents which I’ve mentioned in this (Link to how to evaluate a plot) blog post.

If you have trouble reading and interpreting these sometimes-very-technical documents, make sure a project management company, engineer or architect checks the files for you. He can summarize his findings in an easy-to-read report for you.

What should we check during the inspection?

Technical due diligence

As this blog is focused mainly on companies doing multiple construction projects, I am assuming that we are not talking about a small shed here. So the building that you are contemplating buying should have a thorough inspection from a professional company. In our lingo this is known as technical due diligence or TDD. You’ll get a report stating the various risks and problems with some sort of risk scoring factor. Some companies use numbers, others use traffic lights, and yet others just use colours to highlight the important, not-so-important and unimportant findings.

Check all the rooms

Make sure that the owner shows you all the rooms and explains the technical aspects of the building. This includes, but is not limited to, HVAC, electricity and potentially the automated building management system. Don’t be afraid to flush the toilet, open and close windows, check if the water in the kitchenette is running and so on. Often you’ll find defects that way.

Inspections

Have the owner give you the books that show if all the inspections have been done on the building. A lot of elements in an industrial building need regular maintenance and very often this is neglected. This could tell you that you would need to add a reserve to exchange certain elements and it is also a good bargaining chip for you.

Some elements that should be regularly maintained or inspected:

  • Ventilation
  • Fire extinguishers
  • Fire resistant doors
  • Electrical installations
  • Smoke detectors
  • Electrical roll-ups
  • Scissor lifts
  • Elevators
  • Windows
  • Roof
  • Solar panels

Photos

Take a lot of photos, ideally of each room. You’ll thank yourself later on when you’re not quite sure what state certain areas were in, or what they looked like.

Now you know what to do

Now you know what the building looks like. You have a technical due diligence report stating all the risks and the costs. So finally you are ready to answer the question which I asked in the introduction. Will I convert the building or does it make more sense to demolish it and build a new one?

Get your free checklist

Quite a lot of questions need to be answered, for example, how old is the building? Which kinds of fuel are used for heating? and so on.

That’s why we’ve created an easy-to-use checklist for the essentials.

With our checklist you’ll make sure that you’re asking the right questions and inspecting the right elements within the building.

Contact me if you want to receive our free checklist. You can reach me at “info (at) bakmanagement (dot) com”.

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