2. Procedures and Protocol
2.1. Documentation Review
Upon being awarded this assignment, ABC issued a written request to the owner or his agent to obtain certain documentation to review on behalf of XYZB, which was intended to serve as an aid for our survey. The Documentation and Information Checklist and a Presurvey Questionnaire and Disclosure Statement were forwarded to the Subject’s ownership for reply to ABC. Refer to the Exhibits for copies of these documents.
ABC’s Presurvey Disclosure Questionnaire and Document and Information Review Checklist (the “Checklists”) were not returned to our office by the owner. The Checklists also inquired of latent defects, the discovery of which is beyond the scope of this survey, historical repairs, and improvements. This information was to assist our research to discover chronic problems, the extent of repairs and their costs, pending repairs and improvements, and existing physical deficiencies.
2.2. Site Visit
The site visit consisted of a visual walk-through survey of the Subject’s easily accessible and readily observable areas to note significant deferred maintenance and the general condition of major components and systems. Mechanical and electrical equipment not normally operated by residents was neither operated nor tested by ABC, and nor was any exploratory probing or dismantling of the Subject’s components conducted. This was a nonintrusive visual survey.
2.3. Research and Interviews
Available on-site property management and maintenance personnel were interviewed by ABC to inquire about past repairs/improvements, pending repairs, and existing or chronic physical deficiencies. We also contacted and interviewed salient building service company personnel for the same aforementioned reasons. To the extent that XYZB, owner, service company personnel, or their representatives have provided information regarding the Subject’s operation, conditions, quantities, and capacities, and that such information appears reasonable, ABC has taken the position that such information was correct and complete.
5. General Descriptive Information
Remington Apartments (the “Subject”) consists of a rectangle-shaped parcel of land that totals approximately 1.92
acres. The Subject is currently developed for multifamily residential use with five 2-story, multifamily residential buildings that total approximately 39,440
sqft and containing 48
apartments; a single-story restroom/pool equipment building consisting of approximately 400
sqft; and a single-story laundry building consisting of ±750 sqft also exist on site.
The property is accessed off of Stanford Square along the northern property boundary. An access drive also exists along the south side of the property along. This southern access drive is currently blocked by a gate since nonresidents were reportedly using the property as a convenient short cut. Landscaping consisting of grass, trees, and shrubs exists along the northern property line and the south side of the property. The majority of the asphalt paved parking and drives are located on the east side of the site. Parking is provided for approximately 30 cars in steel-framed carports, and another 60 spaces exist at grade in uncovered parking. Five spaces exist under two of the buildings in carports on the south side of the property.
All five residential buildings are constructed over concrete slab-on-grades, and although not visible, their foundations likely consist of conventional spread footings. All the buildings are of wood frame construction, and their exterior walls are covered with stucco. The two buildings on the south side of the property have hip style roofs that are covered with concrete tiles. The three buildings on the north side of the property have concrete tile mansards, and the flat portions of the roofs are covered with rolled mineralized roofing systems. All apartments are accessed from a private entrance at grade or a common area balcony. In addition, all apartments either have a private patio or balcony on the opposite side of the building from the front entrance.
Balconies are cantilevered extensions of the second levels’ floor joists. The front common area balconies also have wood columns for further support. Rear private balconies are only cantilevered. All balconies are covered with plywood and a mineralized felt roof covering for protection from the elements.
Heating to the units is provided by individual natural gas furnaces manufactured by Payne. These units are typical located within a mechanical closet in every apartment. Air conditioning is provided by individual direct expansion (DX) units with exterior pad-mounted condensing units. The evaporator coils for the units are located within the closet-mounted furnace which acts the HVAC system’s air handling unit. Conditioned air is then distributed in the apartment through the ductwork hidden in each apartment’s central hallway ceiling for distributionvto the various rooms. Domestic hot water is provided by individual gas-fired water heaters that typically have a capacity of ±50 gallons. Hot water to the pool pumping equipment is provided by a gas-fired boiler. All piping was observed and was reported to be copper.
Electrical service is 800-amp, 120/240V, single-phase, service, and appeared to be adequate for the building and its current electrical load. Each unit is
individually metered for electricity, and the common areas are metered separately. All units are also individually metered for gas consumption.
The City of Dulles provides service to the Subject for domestic water and sanitary sewer. Dominion Power provides electricity, and natural gas is provided by Washington Gas. Storm water runoff from the property sheet flows to the service drive/parking area on the east side of the property and is discharged into the gutter along Stanford Square on the south side of the property.
6. General Physical Condition
Generally, the Subject was considered in poor to fair condition. It was evident from the survey that the Subject has been the recipient of a minimal amount of preventive maintenance. If the present level of preventive maintenance being provided is improved, and the few areas of deferred maintenance and existing physical deficiencies discussed herein are corrected, the property should continue to retain its ability to compete in the marketplace.
It is our opinion that the remaining useful life of the property can continue for its intended purposes for at least an additional 35 years if the recommended repairs in this report are made, the physical improvements receive continuing maintenance, and if the various components and/or systems are replaced or repaired in a timely basis as needed.
All materials faults and/or deficiencies observed which require immediate expense consist of the following:
• The exterior electrical closet’s doors have fallen off and the buildings’ switch gear, cable TV, and telephone wiring are exposed to the elements. Replacement of the doors is recommended.
• The two buildings on the south side of the property have grade-level carports. Lighting for this area is provided by fluorescent strip fixtures which are mostly broken and require repair. Replacement of severely deteriorated storage room doors and hardware is also warranted.
• Carport roofs are damaged in various areas as a likely result of vandalism and require repair and in some areas replacement.
• The pool’s gas-fired boiler is broken and requires repair. Given its age and condition, replacement is likely warranted.
• The Subject’s air conditioning condensing units are approaching the end of their expected useful lives. Given this scenario and the lack of preventive maintenance exercised over the years, it can be expected that numerous units will fail in the near future. Budgeting for these replacements is warranted.
• Finishes within the apartment units were excessively worn beyond their years and replacement of carpeting, resilient vinyl flooring, and cabinets can be expected in the beginning of the reserve term. Gas-fired ranges (the only major appliance provided by management) were also observed to be aged beyond their years, and replacement of numerous units can be expected in the reserve term.
• Mold has grown on numerous areas of the buildings’ facades and dirt as splashed up on the lower portions of the building’s elevations. Powerwashing of the building facades is recommended in the short term.
• Wood trim found on the buildings, and the first floor apartments’ privacy screen fences are in need of painting.
• Several deteriorated areas were observed on the building’s common area balconies. The superintendent has made “patch type” repairs to these areas with plywood. However, this is not a waterproof solution, and covering the areas with a membrane application which exists on the remainder of the balconies is warranted.
7. Summary of Findings
In overall assessment, considering its age, use, and location; the condition of the buildings and site improvements is considered good.
There are a limited number of deferred maintenance items, which should be corrected as part of routine maintenance.
There are a number of immediate repairs/replacements required at this time as follows:
Immediate action item | Cost |
Replace missing electrical closet doors Repair damaged stucco on building exteriors and paint Remove tenant constructed canopies Install membrane on areas of repaired balconies | $1000 $500 – $300 |
Total | $1800 |
Short term (YR 1) items | Cost |
Seal coat parking lot, drives, and Re-stripe Repair and replace areas of damaged carport roofs Repair broken light fixtures at underbuilding parking Replace deteriorated doors at underbuilding parking Replace deteriorated door at pool pump house Powerwash building facades Paint exterior stucco | $1900 $1200 $500 $900 $150 $2500 $16,800 |
Table Continued |
Short term (YR 1) items | Cost |
Landscape upgrades Replace pool water heater Paint exterior trim and patio screen fencing make repairs to fencing as needed Replace interior carpeting at damaged units (24 units ± 50%) to include living and dining rooms Replace damaged vinyl flooring in kitchens and baths (24 units ± 50%) Replace deteriorated gas ranges (24 units ± 50%) Replace Deteriorated Cabinets (26 units ± 43%) | $3000 $1500 $3000 $15,600 $3600 $7200 $16,400 |
Total | $72,250 |
Using a 2.5% inflation rate over a 12-year term, the estimated funding requirements for capital reserve expenditures are:
Factor | Aggregate | $/SF/Year |
Uninflated | $122,150.00 | $0.26/SF/YR ($212/Unit/YR) |
Inflated @ 2.5% | $143,920.00 | $0.30/SF/YR ($250/Unit/YR) |
8. Consultant’s Certification
On behalf of ABC International, Inc., I hereby certify that:
1. I have no present or contemplated future interest in the real estate that is the subject of this report;
2. I have no personal interest or bias with respect to the subject matter of this report, its ownership, management, or any of the Subject’s service companies or vendors;
3. To the best of my knowledge and belief, any statement of fact contained in this report and any information provided by others, upon which my evaluation, opinions, and recommendations expressed herein are based, are true and correct;
4. The compensation received for this report is not contingent on any action or event resulting from the evaluations, opinions, recommendations, or the opinions of probable costs expressed herein or the use of this report;
5. This report was prepared to disclose observed existing conditions and for information purposes only. Neither I nor ABC warrant or guarantee the results of any of its opinions, information provided by others, or the adequacy of the opinions of probable costs provided to
remedy the Physical Deficiencies or for the Modified Capital Reserve Schedule; and
6. This Abbreviated Property Condition Assessment was prepared with the standard of care and skill ordinarily exercised by single-source due diligence construction consultants that specialize in conducting general overview, preliminary property condition assessment surveys of similar scope and purpose, in the same locality, under similar budget and time constraints on behalf of mortgagees for underwriting due diligence purposes.
______________________________
John A. Doe
Field Observer