Industrial Building Inspection
Sometimes a simple visual inspection of an industrial building is enough to satisfy a prospective buyer or tenant before they sign a lease or purchase contract. In most cases, it’s not. Relying on a visual inspection is kind of like looking in the mirror to check your cholesterol. Equally worse, relying on a landlord’s broker to comment on condition, age, or lifecycle of building systems can also leave you on the hook to repair the building and its systems much sooner than expected.
Let’s look at some building systems and features to determine how to properly address them before you sign a lease or purchase a commercial industrial building.
Start by asking and validating the age and useful life of the systems on the roof that cool the office premises. To validate the age and remaining useful life, request maintenance records to confirm that the systems have been maintained on a quarterly basis and find out when it was installed. It doesn’t hurt to ask some neighbors if you are considering a multi-tenant building about actual maintenance practices, especially in inclement weather geographies. Are there any legacy systems left on the roof that could compromise the roof membrane? Who is responsible for repair and/or removal of those systems? The final step is to negotiate a warranty on the systems integrity along with lease language to offset costs of repair or replacement during the last lease year. Typical warranty periods achieved in negotiations are up to 12 months.
SLAB, FOUNDATION, AND DOCK HEIGHT
A visual inspection will help identify cracking, shifting, sloping, or chipping of seams that can lead to damage to material handling equipment. If there is unplanned sloping, or settling, this may impact the installation of a racking system. When was the building constructed and what were the construction practices at that time related to compaction of the site? The height of the warehouse floor compared to the truck well height should also be analyzed by the transportation team to confirm the tractors, trucks, and delivery vehicles can load & offload effectively. What are the average dock heights and are the docks level? For facilities that receive freight from various carriers, it’s important that dock height is between 48”-52” in order to not damage Edge-of-Dock equipment or worse, cause an accident due to excessive sloping. Driving fleet vehicles to the site is a great way to test dock height and functionality.
Is the building served by fiber lines and which companies provides service currently? This can impact alarm monitoring system capabilities, total cost to deploy alternative services like satellite or dark fiber, and timing to transition an operation. Sometimes a provider will claim they service a building, but during a technician visit, that promise may change without risk.
A licensed building inspector or electrician should help a tenant or purchaser evaluate the service to the building. It’s always best to test or verify within the lease the period of time you have after lease signature to validate electrical panels, distribution, transformers, and wiring is in good working condition as of the date a tenant accepts the premises.
DRIVEWAYS, TRUCK COURTS AND YARDS
How is the drainage, gutters, and sloping of the property? Are there areas where it appears water can accumulate or seep into/near the building structure? Have the gutters been damaged or clogged that would impact their function to release water from the building efficiently? Sometimes, if drains are not properly cleared, water can gather on the roof and compromise the roof membrane.
Is the yard permeable such as ¾ inch rock, decomposed granite, or road base? The material of a yard will impact how often it requires new surfacing and how it handles weather events. Soft, non-compacted yards can lead to trailers sinking, poor operating conditions, and additional vehicle maintenance. Understanding the prior site users and inspecting the types of vehicles or activities on the site will shed light on the suitability of a yard. Who is responsible to perform and pay for repairs and maintenance of the truck court or yard areas? Sometimes in a multi-tenant lease this will be budgeted as a common area expense, while in single-tenant building, the tenant will be 100% responsible. This should always be carefully negotiated during the lease review process.
Who occupied the property prior to the current date and has there been a recent Phase I or Phase II Environmental Assessment? Similar to a visual inspection, a Phase I is a visual assessment and records search. That doesn’t mean you are free and clear of pre-existing conditions. In a trucking environment, if there are plans to alter the property or operate trucks, talk to an attorney about how to establish a baseline and prevent future claims arising from prior uses at the site. ‘Who does this oil belong to?’ is a scary question to have to answer at the end of a lease term.
FIRE SUPRESSION SYSTEMS
In the case of a lease, it is important to understand who is responsible to maintain the fire systems of the building and to also understand how the system is designed. What are flow ratios and is that ratio appropriate for your operation? County fire code will determine the required flow ratios for a given list of inventory whether or not the volume and racking design. The quickest way to get answers is to work with local fire inspectors and submit quantities and types of materials in order to validate compliance given existing systems in place. In most cases, an Early Suppression Fast Response (ESFR) can accommodate almost all uses, except corrosives or explosives which require additional permits.
Having a thorough investigation into these areas will help avoid discovering unknown risks when a business looks to buy or lease a building.