Cost Data and Budgeting - Commercial Property Inspection and Property Condition Assessment Considerations

Physical Plant Capital Expenditures

Property Condition Assessment Budgeting

Maintenance and Repair Budgeting

Property Condition Inspection Costing Data

Capital Expenditure Budgeting

Building Condition Costing Data

Commercial Property Condition Assessment Budgeting

• General Overview capital expenditures.

 
Sometimes a general overview of expected capital expenditures will be sufficient when the property purchaser is already well informed of the condition of a commercial property and has already negotiated and agreed upon responsibilities and costs associated with the purchase.  This is a general overview and has no specific time frame specified to for any repair or replacement costs. A Commercial Property Condition Assessment or Commercial Property Inspection can help not only with general cost and budgeting information but all of the following cost categories as well.
 

• Immediate Remedial and repair costs.

 
The immediate remedial and repair costs for any specific items observed on the commercial property will often appear in both the executive summary of costs and in the capital reserve expenditure schedules, as these cost items may need to be addressed prior to a change of occupancy or ownership.  The timeframe specified for repair or replacement costs of immediate remedial items will likely be within year zero. The costs associated with this work will likely be based upon professional published costing data in today’s dollars plus any reasonable regional cost adjustments.
 

• Short-term Deferred maintenance costs.

 
The short-term deferred maintenance costs again will likely up in both the executive summary of costs as well as the capital reserve expenditure schedules, it is these cost items may need to be addressed shortly after change of occupancy or ownership. The timeframe specified for repair or replacement costs of immediate remedial items will likely be within year one. The costs associated with this work will likely be based upon professional published costing data in today’s dollars plus any reasonable regional cost adjustments.
 

• Intermediate Maintenance and replacement costs.

 
Intermediate maintenance and repair costs will typically be summarized within the capital reserve expenditure schedules with the varying time frames for repair and replacements based upon the age and condition of the systems and equipment and components observed.  These cost items are generally for work foreseen as eventually, but not immediately, necessary after year one but necessary before year ten. The costs associated with this work will likely be based upon professional published costing data in today’s dollars plus any reasonable regional cost adjustments, plus at least three percent inflation per year until the date associated with the cost.
 

• Long-term Planning and Budgeting costs.

Long-term planning and budgeting costs will generally be included only and they expanded capital reserve expenditure schedule or in a separate ten plus two and beyond schedule of future estimated costs.  The costs associated with this work will likely be based upon professional published costing data in today’s dollars plus any reasonable regional cost adjustments, plus at least three percent inflation per year until the date associated with the cost.

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