3.) Address Utility Requirements
Make sure all mail – but especially utility invoices – from the property is forwarded to the appropriate party. Contact your local post office to take care of this issue or update your address online.
With a vacant building, you’ll want to try and minimize ongoing expenses related to the property. Reduce heating and air conditioning to minimal levels.
“I took a new client on a walkthrough of a large office building that had been vacant for over one year. On six of the floors I found individual offices with air conditioning units operating at full speed,” Insul says. “Turning these down or off dramatically reduced the bills.”
After the last tenant exits the building, cancel non-essential telephone service unless it is necessary for an alarm system. Insul also recommends terminating other non-essential service contracts such as extermination, trash removal, window washing, janitorial needs, and laundry.
4.) Inspect the Building and Document Findings
Immediately after the vacancy has occurred, one of the most critical steps involves inspecting the building and reporting on the overall condition of the property, Insul notes. CAP uses a checklist – the Property Condition Report (PCR) – for this.
You want to create a baseline of how the property looks and what issues need to be addressed. This information could include property damage, existing and potential citations, signs of deterioration, and life safety concerns.
This inspection should be tailored to the type of building and geographic location.
“Equipment requirements are different in a convenience store than a 10-story office building,” Insul explains. “Likewise, a property in northern Minnesota is affected by different weather concerns than one in southern Texas.”
Photo documentation will provide a key reference point should anything occur. A failure to properly document the condition of the property after vacancy may put you at a risk of losing insurance coverage for theft, water damage, vandalism, and more. Photos before and after repairs and of debris and personal property are key.
A trained inspection specialist is necessary for identifying environmental or safety hazards, Insul notes. Placing an order for hazards to be rectified will reduce risk and liability.
“These hazards can create a crisis for cost and company reputation,” Insul says. “Mitigating their risk is critical. The findings of the inspection can change a client’s whole goal for the property. There have been situations where holding strategies have changed to demolition plans.”
The property may also need to be updated based on current code requirements. It may be necessary to contact local officials to address violations. Upon completion of code repair work, provide proof to local enforcement to clear any issues.
5.) Invest to Get Value out of Vacancy
While it might seem counterintuitive to spend money on a vacant building, neglecting the maintenance, protection, and preservation of your facility will lead to greater financial losses down the road.
“How you maintain your vacant asset not only impacts your reputation, but it greatly influences the future marketability of your site,” Insul says.
Taking preventative measures – even if they require monetary investment – is crucial. These steps ensure your commercial property is up to standard and ready to reuse faster, ultimately saving time and money in the long run, says Insul.
“Preparation is not just good for the budget,” he adds. “It’s key for not becoming that scary eyesore on the block.”
Chris Curtland email@example.com is
assistant editor of BUILDINGS.