LOS ANGELES-The GlobeSt.com readership hears every day about the obvious forces affecting commercial real estate—factors like supply and demand, availability of capital and of course location, location, location. But not everyone is as familiar with the non-market forces and risks that can also have a significant impact on deals. Many of those forces are specific to the asset itself, such as environmental issues, the physical condition of an asset, zoning issues and energy performance.
It is key for us here at ALM's Real Estate Media Group to not only inform our readers about important topics, but to also be informed by our readership. This survey conducted with GlobeSt.com and one of its Thought Leaders, Partner Engineering and Science Inc., is was designed to do exactly that.
As consultants, Partner deals with asset-level issues all day long, and together, we wanted to get the broader industry's take on how these issues are viewed, how seriously they are taken, and how things have changed in recent years. What property risks are most concerning? Are professionals more comfortable taking on these risks today compared to 12 or 18 months ago? How does the industry view risks of natural disasters? These and related questions were the subject of the study that was undertaken and completed by more than 500 senior-level commercial real estate executives.
The responses indicate that “CRE executives appear to be determined to not repeat the mistakes of the great recession and are taking asset-level risks – physical condition, environmental, and regulatory – more seriously in this cycle,” explains Joseph Derhake, PE, president of Partner.
One of the most common threads throughout the reader responses was how concerned they were about environmental risks. For example, when we asked the participants which third party report was of greatest value, two-thirds (67%) of respondents cited Phase I Environmental Site Assessments (ESA). Almost as many (61%) selected the Property Condition Assessment (PCA). Other reports cited by a significant proportion were Property Appraisals (47%), and a Land Survey/ALTA Survey (35%). Only 23% cited the Zoning Report.
And as you will see, we also got a few surprising answers. To learn more, please visit the white paper, and don't forget to leave your comments below.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
