How to Risk Manage Commercial Property Inspections

August 15, 2019 | Commercial Real Estate

Commercial Property Inspection

Time is money

If you’re looking for a commercial property, you probably want to find one quickly for a number of reasons. The most obvious reason is financial – time is money and you want to find a suitable space as soon as possible, instead of going through a continual series of checking listings, chasing agents and planning property inspections. Also, you need to keep the business running and want as little disruption as possible.

In reality though, it takes a lot of time and resources to find the right property. And time is vital! You don’t want to feel pressured to decide on a property because you are running out of it.

Inspections are inevitable

There is no other way around it, an inspection is the only way to find out everything you need to know about the property before signing on.

Here’s what you need to consider in order to risk manage your inspections:

Know What You’re Looking For

In general, most companies look for a number of key items when seeking commercial property;

  • Location, suitability, and accessibility
  • Size and floor level
  • Price and commercial terms
  • Building quality and amenities
  • Staff engagement and retention

Other things to look out for

But there’s a number of things you must consider from a risk management perspective. These are initially often overlooked and surface as problems later down the track.

Area size Check:

Is there an accurate floorplan and does it show the actual net lettable area of the premises? If not, you could easily end up paying for space that doesn’t even exist!

Preliminary Programming:

Pre-determine how your ideal office looks like.  Identify the right number of workstations, open plan desks, separate offices, meeting rooms, break out and collaboration areas. Do you really still need a reception, or can it be a collaborative space with a front desk? Knowing what you need from the outset makes the selection process more efficient.

Preliminary Cost Planning:

A good preliminary program also helps to estimate the average costs of the future fit-out. Knowing the average cost of your fit-out will also help to compare buildings of similar size with different layouts. It also assists to compare quotes from contractors costs.

Base Building Services Check:

This will check all aspects of the property like mechanical (heating, cooling, ventilation, airflow, lifts), fire systems, building automation and control, electrical systems, etc. Essentially, it tells you whether the building is well maintained. And while the landlord is liable for such repairs, you don’t want the inconvenience of moving into a building with poor utilities.

Building Fit-Out Guide:

Some commercial properties are quite prescriptive in what they will allow, and the standards of fit-out required which will impact the budget and fit-out costs

HAZMAT Report:

Check to make sure there are no hazardous materials on the premises that may affect the health and safety of your workers or the environment.

Development Application Requirements:

Before shortlisting a property, check the costs associated with further development, including council approvals. Don’t be surprised by unexpected fees or exclusive contractor obligations.

Get Advice from the Professionals!

As you can see, there’s a lot more to consider than just the size, location, and rental costs when it comes to choosing a commercial property. To ensure you can risk manage each property you inspect, contact us today for professional advice.

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The Author

Maxwell brings over ten years of commercial real estate experience and currently works as a tenant representation specialist in the tenant representation Sydney team. He says some of his more memorable projects over the years include an 11,000sqm lease renewal in Islamabad, Pakistan, and the sale of a 200sqm commercial unit on the Canals of Amsterdam.

In his spare time, Maxwell is a loving father, backcountry skiing fanatic, boat lover and food enthusiast.

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