The acquisition and finance of commercial real estate are often riddled with complex issues. Before closing, both lender and buyer need to be thorough in their due diligence. It is imperative that stakeholders learn as much as possible about the property, existing conditions and restrictions, title issues, zoning ordinances, tenants, leases and environmental hazards.
Environmental Site Assessment
Under federal and state laws, the owners of real estate can be liable for cleanup of hazardous substances and petroleum products released on their property. This is true even if the release occurred before the owner became involved in the property or has no other direct responsibility for the release. As a result, related cleanup costs have a material, and sometimes catastrophic, impact on the value of real estate. Related impacts on cash flow, leasing, resale and the ability to obtain financing can all be contributors to a diminution in value.
Understanding of the environmental risks associated with a property can help property owners, buyers, lenders, and investors to protect hard-earned assets. GRS Group provides the following services to help clients identify environmental risks that can significantly impact their financial future:
- Phase I Environmental Site Assessment
- Review & Update of Existing Reports
- Risk Assessment per SBA Criteria
- Transaction Screen Assessment
- Lead Paint, MMP and Asbestos O&M
- Phase II Limited Site Characterization
- Remediation Project Management
Environmental assessments for property transfers focus on assessing the potential for environmental liability and impact to value. Because significant business and risk management decisions are based on the data generated, they require extreme care and diligence in their execution. It is GRS | Corteq practice to staff these projects with the most qualified professionals and to ensure that the work associated with the project undergoes a thorough technical review.
GRS | Corteq staff has extensive experience in developing and implementing client-specific scopes of work and reporting formats. Whether a client has developed their own proprietary scope of work or must meet the requirements of a capital partner or the secondary market, GRS | Corteq is flexible and well- versed in the wide variety of scope variations that exist in the marketplace today.
Facilities Assessment Services
Unexpected costs resulting from physical deficiencies, deferred maintenance and replacement or repair of key building systems can significantly impact operating costs and cash flow, disrupt building operations and erode the value of otherwise profitable investments. By evaluating the condition of improvements and expected capital expenditures, investors and lenders can avoid costly surprises. GRS Group offers the following facility assessment services to provide clients with the information they need to manage uncertainties to preserve the value of their investments:
- Property Condition Assessment (PCA)
- Seismic Risk Assessment (SRA)
- Property Acquisition Assessment
- Green Building (Energy) Assessment
Understanding the condition of a structure as well as the major building systems and components can be critical to the evaluation of the economic viability of a transaction. Recommended replacement expenditures and deferred maintenance schedules become critical data not only during the due diligence phase of a transaction, but also during the management phase of a property. Reviewing construction cost estimates and construction progress monitoring provides an impartial third party review during the preparation of construction budgets and confirms that the project is on schedule and materials are on-site prior to payment of invoices for goods and materials. GRS Corteq’s professional staff of licensed engineers, registered architects, construction experts and cost analysts are experienced in responding quickly and effectively to the detailed requirements and fast turnaround times demanded by our clients.
GSE (Government Sponsored Enterprise) Lender Services
GRS | Corteq is one of the leading providers of assessment services to Fannie Mae DUS Lenders and Freddie Mac Seller/Servicers. We have completed thousands of assessments on multifamily, student housing, seniors housing and manufactured home community properties across the US. We fully understand the technical requirements of these agency programs, and we have teams dedicated to keeping abreast of ongoing changes in those agencies’ service requirements. Our clients look to GRS | Corteq to help them navigate the nuances of these evolving guidelines, and several underwriting teams have had GRS | Corteq provide training. We have provided assessments for both agencies’ small balance loan programs since their inceptions and have evaluated thousands of properties for those programs.
GRS | Corteq is among the select consultants pre-approved for both Fannie Mae’s and Freddie Mac’s Green rewards programs. Our working knowledge of the Fannie Mae and Freddie Mac guides enables us to provide reports that move quickly through the review process at the Seller/ Servicer and DUS lender levels, as well as with regional agency staff reviews.
Our services include the following:
• Phase I ESA
• Property Condition Assessments
• Assessments for supplemental mortgages and assumptions
• Freddie Mac and Fannie Mae-specific Forms
• Small Balance Loan Assessments
• Radon testing: Short term and long term follow up
• O&Ms (Lead paint, Asbestos, UST, Transformer, Moisture Management)
• Peer reviews
• Fannie Mae High-Performance Building Reports
• Freddie Mac Green Up® and Green Up Plus® Assessments
• Seismic Risk Assessments
• Freddie Mac FRED program assessment
• For Forward Commitments and Moderate Rehabilitation Mortgages:
– Pre-construction analysis reports
– Construction monitoring
– Post Construction Analysis reports
Utilization of old or inefficient mechanical, electrical, and plumbing equipment and fixtures can increase the amount of water and energy usage at a facility and the associated costs. By reviewing a property’s historical water & energy usage and evaluating the systems in place, capital improvement recommendations can be made to reduce these expenditures. GRS | Corteq offers the following Energy Assessment Services to provide clients with the information they need to reduce the energy & water costs at their facilities:
• ASHRAE Level I and II energy audits
• Energy audits associated with Freddie Mac Green Up program
• Energy audits associated with Fannie Mae Green Rewards programs
• Baselining and general review of historical energy usage
The energy audits include the following tasks:
• Collection and review of current energy & water usage to develop baseline usage
• On-site inspection including direct field measurement of pertinent variables for energy calculations
• Identify and calculate energy/water savings for potential projects
• Develop budgetary costs and simple payback for potential projects
• Produce report and complete forms as required (Freddie Mac & Fannie Mae programs)
Of note, review of current usage and understanding the baseline usage can also be performed as a standalone
Our energy engineering team members have performed energy audits on a wide range of facilities from smaller
multifamily buildings, large apartment complexes to university and hospital campuses. The audits have
been performed as part of the Fannie Mae/Freddie Mac green programs, as well as for governmental mandated
programs such as Act129 in Pennsylvania and Local Law 87 in New York City and standalone energy audits.
Our team includes engineers with Professional Engineering licensing, Certified Energy Managers, and Commissioning
Project Management Professionals. Professional affiliations include the US Green Building Council,
ASHRAE, and the Association of Energy Engineers.
Construction Advisory Services
Our Construction Services team has experts around the globe experienced in the management of construction lending risks including pre-construction project reviews, ongoing monitoring, and construction closeout services.
Our unique insight and processes allow us to head off problems before they start. GRS | Corteq brings together a considerable wealth of knowledge and expertise, providing national lenders and equity investors with the level of project management and accountability necessary to ensure the timely completion of complex development projects. Our senior management team has an average of 20 years of construction management experience.
GRS | Corteq prides itself on delivering quality, professional services to every client. We have completed Construction Cost Analysis, Construction Progress Monitoring, and Construction Completion Assessments on all types of projects, including commercial/retail, residential tract development, assisted living, hospitality, and industrial developments. Our success and repeat business serve as a testimonial to our competence in the administration and management of projects nationwide through the implementation of a systematic approach to all aspects of project management from initial concept to successful completion and payoff.
Pre-Construction Plan and Cost Analysis
GRS | Corteq has a team of engineers and architects who are highly trained and experienced in conducting pre-construction due diligence to support and facilitate our clients with, cost analysis, and schedule viability of the proposed projects. The review and analysis process is designed to provide GRS | Corteq’s clients with the information needed to evaluate proposed construction projects and related budgets.
GRS | Corteq’s Construction Cost Analysis process includes the following tasks:
• Perform an independent cost estimate of the proposed development; review the feasibility of the scope of work, construction schedules, and proposed improvements.
• Review the adequacy of the proposed development budget, schedule of values, and progress schedules.
• Assess the status of construction documents; i.e., architectural and site development plans, design specifications and contract documentation.
• Evaluate the representations made in the soils and environmental reports to determine their impact on the proposed development and construction costs.
• Verify that building department plan checking has been completed and all required permits have been secured to allow the commencement of construction, as well as the granting of ongoing periodic approvals.
Construction Progress Monitoring
GRS | Corteq’s organization is ideally suited to provide Construction Progress Monitoring on a nationwide basis. Our field representatives perform site surveys on a predetermined schedule to ensure that the project is proceeding according to schedule, in compliance with plans and specifications, and that disbursement requests are within budget and assigned to the appropriate line items. Subsequent to the site visit, GRS | Corteq prepares a written report compiling the results of the site survey, in correlation to the disbursement request.
While performing the site survey, GRS | Corteq conducts the following reviews:
• Verify the percentage of work completed in relation to current payment application and progress schedule
• Confirm inventory of stored materials either on or off-site
• Evaluate the sufficiency of funds for the project completion
• Forecast potential problems related to the quality and/or workmanship and project management
• Review and evaluate change orders to determine any impact on the project budget, schedule, and compliance to the originally proposed development
• Examine quality control measures and compliance with regulatory agency and building codes, as well as the recommendations and specifications included in the original construction loan analysis
• Provide recommendations as required
Construction Completion Assessment
GRS | Corteq provides the expertise required to evaluate the progress to date and assess the remaining costs to complete the construction as specified. This is particularly useful to clients who need to re-evaluate construction projects which may have gotten off-track. The project information is evaluated along with a visual assessment of the construction project. The assessment includes a review of the construction contract with an analysis of the adequacy of the remaining undisbursed construction budget and contingency funds to complete the project as well as a review of contractors’ lien waivers and inventory of purchased materials stored on or off-site. Lenders and note purchasers can then assess the costs and risks of completing construction.
ALTA Survey & Zoning
GRS Group coordinates survey and zoning needs for clients throughout the U.S. Through our Service Affiliates, we are able to provide coverage for clients that require single-site as well as multisite projects. Our typical client groups include Owners, Title Companies, Law Firms, Corporations, REITs and Lenders.
We specialize in Land Title Surveys for multi-site, multi-state commercial real estate transactions. Our typical client groups include Owners, Title Companies, Law Firms, Corporations, REITs and Lenders. GRS Group is a proud member of the American Land Title Association, the national trade association for the title industry.
All survey reports are written to the ALTA standard. ALTA was founded in 1907 and represents 2,000 abstracters, title insurance agents, and underwriting companies.
The Purpose of Zoning is to allow Counties and local jurisdictions to guide growth and development in harmony with current and future land use and to protect health, safety, appearance, and prosperity.
At its core, a Zoning Report outlines whether or not a property conforms to, or is in compliance with, its municipality’s zoning code. As such, they act as a brief but comprehensive analysis detailing a subject property’s respective jurisdiction, zoning designation, zoning ordinance, lot area, permitted uses, lot line setback, density and associated and applicable parking regulations. Lenders often require these informative assessments.