PROPERTY CONDITION ASSESSMENT of … · PROPERTY CONDITION ASSESSMENT of . XXXXXXXXXXXXXXXXX ....

PROPERTY CONDITION ASSESSMENT of

XXXXXXXXXXXXXXXXX XXXXXXXXX, Colorado

Prepared for: XXXXXXXXXXXXXXXX

January 30, 2008

Fred L. Thrall, LLC Commercial Building Consultant

4871 Fountain Street, Boulder, CO 80304 [email protected] www.fredthrall.com

303.359.6980 fax 303.443.1093

mailto:[email protected]

http://www.fredthrall.com/

Fred L. Thrall, LLC Commercial Building Consultant

4871 Fountain Street, Boulder, CO 80304 ‘[email protected]’ www.fredthrall.com 303.359.6980 fax 303.443.1093

TABLE of CONTENTS

EXECUTIVE SUMMARY ……………………………………………………………… 1 PROBABLE COSTS to REMEDY PHYSICAL DEFICIENCIES………………………. 3 SCOPE of WORK ………………………………………………………………………. 5 DOCUMENT REVIEW & INTERVIEWS ……………………………………..…….….. 6 PROPERTY PROFILE …………………………………………………………………… 6 SUMMARY OPINION ………………………………………………..………………… 7 PROPERTY DESCRIPTION & OBSERVATIONS …………………………….…….… 8 LIMITATIONS of OBSERVATIONS …………………………………………………... 22 CONSULTANT’S QUALIFICATIONS …………………………………….………….. 23 APPENDIX: PHOTOGRAPHS ………………………………………..……………….. 24

http://www.fredthrall.com/

Fred L. Thrall, LLC Commercial Building Consultant Property: XXXXXXXXXXXXXXXXX, Colorado

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EXECUTIVE SUMMARY

Date of Report: January 30, 2008 Client (Prospective Buyer): XXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXX

Property: XXXXXXXXXXXXXXXXX

XXXXXXXXXX, Colorado Scope of Work:

Consultant herein presents the results of a Property Condition Assessment of the physical elements of the Property, based in part on a walk-through survey (non-intrusive visual inspection) of the Property performed by Consultant on January 23-24, 2008.

General Description:

The Property is a 5.58 acre rectangular tract of land, currently developed as a light industrial facility. The Property is located on the SE corner of the intersection of XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX in the City of XXXXXXXXX, Colorado; it is bounded on the South by XXXXXXXXX; it is zoned BLI (Business/Light Industrial) and appears to be developed in accordance with this zoning.

The building is a one-story structure of approx. 73,383 gross square feet (per Boulder County Assessor). It was apparently originally constructed in 1977; the south wing was reportedly added several years thereafter. The building is currently 90%+/- occupied.

Conclusions:

In this Consultant’s opinion, the Property is suitable as a commercial-grade light industrial facility. The original construction exhibits good workmanship with fair materials; maintenance has been conducted with less-than-appropriate care. The building suffers from considerable physical obsolescence. The general condition of this property is considered to be FAIR in comparison to properties of its age and type in the greater Denver area.

Recommendations:

The Property has minor physical deficiencies that should be promptly corrected; many deficiencies can be corrected as Normal Maintenance. Deficiencies that are deemed serious (requiring immediate attention to prevent significant deterioration or to mitigate occupant safety or health liabilities, or involving considerable expense) are enumerated on the following page.

In addition, capital reserves should be allocated to provide for on-going replacement of materials & systems whose Expected Useful Life (EUL) terminates within the next 10 years.


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SERIOUS DEFICIENCIES: SITEWORK: 1. Asphalt pavement exhibits considerable cracking and spider-cracking. Remove and replace

spider-cracked areas; seal all cracks. Recommend seal-coating the entire asphalt lot to prolong useful life of the pavement.

ROOF: 1. Flat roof membrane over north wing appears to be at the end of its useful life. Open seams

were observed; considerable evidence of leak problems was observed. EPDM membrane exhibits shrinkage, visible by loss of adhesion of the uncured base flashing from parapet walls and curbs; this indicates failure of the base securement fasteners, which makes the flashing subject to damage and serious leaks. Tear-off and replace this roof.

2. Metal deck roofing at low angle is typically not watertight; this type of roof system is not considered appropriate for office use or storage of high-value materials. Evidence of leak problems was observed. Install an elastomeric roof system, or at a minimum an elastomeric coating over all joints and screws in the metal decking.

HVAC (Heating, Ventilating & Air Conditioning): 1. Cooling capacity appears to be insufficient for normal usage. Recommend further

investigation by a licensed mechanical engineer to determine Client’s needs. 2. The 2 Lennox RTU’s on the north center wing are in disrepair, and are probably at the end of

their useful lives. Further, the 5 McQuay RTU’s appear to be 15+/- years old, and may be nearing the end of their useful lives. Replacement parts will become difficult to obtain; further, production of equipment utilizing R-22 refrigerant is being phased out by 2010. Replace RTU’s as needed.

PLUMBING: 1. There is only one gas meter for the entire building. This means that tenant utility costs

(space and water heating) must be pro-rated and billed by the building management. ELECTRICAL: 1. There are only two utility company electric meters for the various tenant suites. This means

that tenant utility costs (cooling, ventilation, lighting and equipment loads) must be pro-rated and billed by the building management.

2. Electrical distribution appears to be commingled between the various building quadrants; numerous interior remodels appear to have been performed without accompanying changes to the electrical system. Recommend performing an exhaustive survey under the direction of a licensed master electrician, and re-configuring electrical circuitry so that all areas are served by the appropriate panel.


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PROBABLE COSTS to REMEDY PHYSICAL DEFICIENCIES

Following are ball-park estimates by the Consultant of probable cost for: • Immediate repair of serious deficiencies • Staged repair of other deficiencies • Capital reserves necessary for repairs or replacement within a 10-year time period.

These cost estimates are approximations only for the purpose of establishing the general range of costs that might be incurred in the near future (within 10 years from report date). This estimate does not include capital reserves necessary for repairs or modernization beyond this 10-year time period. This estimate does not include costs of Normal Maintenance. This estimate does not include renewing finishes in tenant spaces, which should be covered by a tenant finish allowance related to lease expirations. All costs are shown in January 2008 dollars. To obtain actual and accurate cost estimates, it is necessary that Client consult further with this or other qualified professionals, service companies and/or contractors to determine the exact nature and scope of repairs, and to obtain firm cost estimates for making such repairs. DESCRIPTION EUL IMMEDIATE 2-5 YEARS 6-10 YEARS SITEWORK: 1. Replace broken asphalt pvmt.; seal & seal-coat 6 $ 145,000 $ 16,000 2. Restripe pavement 6 $ 3,800 $ 3,800 3. Construct handicap curb cuts $ 9,600 4. Repair concrete picnic slab $ 2,000 5. Re-grade at catch basin inlet $ 1,500 6. Construct concrete swales $ 5,800 7. Seal sidewalk cracks $ 400 8. Replaced broken & heaved sidewalk $ 3,800 9. Repair & repaint guardrails 12 $ 1,300 10. Upgrade guardrails to meet code $ 12,000 11. Reconstruct concrete steps to meet code $ 1,500 12. Repair gate at fence 12 $ 400 BUILDING EXTERIOR: 1. Repair cracks in masonry walls $ 3,600 2. Monitor cut-in openings (comment only) 3. Repaint exterior walls as needed 12 $ 4,300 4. Re-caulk control joints 18 $ 3,300 5. Repaint exterior steel 12 $ 4,300 6. Remove materials at overhead door $ 300 7. Replace vinyl glazing bead 18 $ 700 8. Eliminate sidewalk heave at entry $ 300 9. Repair exterior door $ 200 10. Repair damaged overhead door $ 500 11. Install FD key box $ 200 ROOF: 1. Remove & replace flat roof at north center wing 25 $ 12,600 2. Install elastomeric roof system on sloped roofs 25 $ 124,800 3. Install overflow drains $ 7,500 4. Install metal coping on parapet walls $ 1,700 5. Install cricket at roof curbs $ 400 6. Install pigeon screening $ 200


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DESCRIPTION EUL IMMEDIATE 2-5 YEARS 6-10 YEARSINTERIOR: 1. Seal cracks in concrete floors $ 600 2. Renew tenant finishes (NOT INCLUDED) 3. Install additional insulation $7,000 $ 7,000 4. Repair ceiling insulation $ 400 5. Replace stained ceiling tiles $ 200 6. Replace carpet (see tenant finishes above) 12 7. Renew painted & VCT floors (tenant finishes) 16 8. Repair cosmetic damage $ 4,000 9. Clear space in front of electric equipt. (tenant) 10. Repair interior doors $ 500 11. Install door stops $ 300 HVAC: 1. Additional cooling capacity (comment only) 2. Replace HVAC units as needed 20 $ 11,000 $ 65,000 3. Additional HVAC for CO VNet tenant $ 7,500 4. Install hail screens $ 1,000 5. Install condensate drain extensions $ 400 6. Repair filter screen $ 100 7. Repair exterior ductwork $ 1,200 8. Replace exhaust fans as needed 18 $ 400 $ 2,000 9. Remove fan in CO VNet space $ 300 10. Winterize swamp coolers $ 200 PLUMBING: 1. Upgrade bathrooms for ADA compliance $ 16,000 2. Replace water heaters as needed 12 $ 1,600 $ 1,600 3. Install drain pan at water heater $ 100 4. Upgrade water heater $ 1,200 5. Repair sewer drain $ 400 6. One gas meter (comment only) 7. Install sprinkler escutcheons $ 200 ELECTRICAL: 1. Two electric meters (comment only) 2. Re-configure electric circuitry as needed $ 22,400 3. Maintain aluminum wiring 12 $ 1,300 4. Re-number electric equipment as needed $ 600 5. Re-label panels as needed $ 600 6. Install breaker cover plates $ 100 7. Install support for disconnect $ 200 8. Replace outlets with GFCI as needed $ 1,000 9. Install strain reliefs as needed $ 1,500 10. Repair outlets as needed $ 1,300 11. Replace lamps as needed $ 1,200 12. Replace fixture lenses as needed $ 600 13. Suspend communications cabling as needed $ 400 TOTALS $ 373,300 $ 36,500 $ 123,400


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SCOPE OF WORK

Per contract with XXXXXXXXXXXXXXXX (Client) dated January 22, 2008, Fred L Thrall, LLC (Consultant) performed a Property Condition Assessment, including a walk-through survey (non-intrusive visual inspection) of the Property performed by Consultant on January 23-24, 2008. This Property Condition Assessment addresses the physical elements of the Property, including:

1. Site improvements & Utilities 2. Exterior & Interior finishes (including moisture control) 3. Structural 4. Roofing 5. Conveying systems 6. Mechanical (HVAC), Plumbing & Electrical

The purpose of this Property Condition Assessment is to inform the Client of the general physical condition of the Property, in the Consultant’s opinion. The scope of work includes:

• Construction defects, inadequate materials or systems • Deferred maintenance • Physical obsolescence • Building code violations, fire & life safety violations • Non-compliance with Title III of the Americans with Disabilities Act (ADA)

Please refer to the Limitation of Observations listed on Page 20 of this report, which describes in greater detail the scope of this survey and applicable exclusions. This report is confidential to the Client, and Consultant assumes no liability for its use by any other party. This Report does not identify minor or inexpensive repairs and maintenance that should be part of a normal operating budget; further, it does not identify repairs and maintenance items of significant cost (such as exterior painting, carpet replacement, etc.) that in the Consultant’s opinion are not expected to be required within the next 10 years. Subsequent studies by this Consultant are available upon request. It is also recommended that other qualified professionals, service companies and/or contractors be consulted to determine the exact nature and scope of repairs, and to obtain firm cost estimates for making such repairs.


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DOCUMENT REVIEW & INTERVIEWS

REGULATORY REVIEW: Consultant researched information available online from the XXXXXXXXX County Assessor’s Office. Consultant also researched local jurisdictional records via telephone and online as follows:

• City of XXXXXXXXX Building Department: No outstanding permits or code enforcement issues on file.

• City of XXXXXXXXX Planning Department: No outstanding compliance cases on file. • City of XXXXXXXXX Fire Marshall: Last inspection 7/06; no outstanding violations or

compliance cases on file. DOCUMENTS REVIEW: Consultant was not furnished original construction documents for review. INTERVIEWS: The following individuals were interviewed by the Consultant:

• Mr. XXXXXXXXX, Property Manager • Several tenants (identity confidential).

PROPERTY PROFILE General property data is as follows: Address of Property XXXXXXXXXXXXXX, XXXXXXXXX, Colorado Jurisdiction City of XXXXXXXXX, XXXXXXXX County, Colorado Parcel Number XXXXXXXXXXXX Zoning BLI (Business/Light Industrial) Use of Property: Offices; R&D; warehouse retail Occupancy: Currently 90%+/- occupied Year Built: 1977 Renovations: Addition of south wing ca. 1982; various interior tenant remodels Land Area: 5.58 acres Building Size: 73,383 square feet (per XXXXXXX County Assessor) Number of Stories: One


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SUMMARY OPINION It is the Consultant’s opinion that:

• The Property is suitable as a commercial-grade light industrial facility. • The original construction exhibits good workmanship with fair materials; maintenance

has been conducted with less-than-appropriate care. The building suffers from considerable physical obsolescence. Overall condition is FAIR in comparison to properties of its age and type in the greater Denver area.

• The improvements are generally in compliance with building codes applicable at the time of construction, except as noted herein.

• The improvements are generally in compliance with applicable requirements of Title III of the Americans with Disabilities Act (ADA), except as noted herein.

The undersigned Fred L. Thrall, as Manager of Fred L. Thrall, LLC, hereby certifies that he personally conducted the inspection of the Property and prepared this Property Condition Report, that all issues observed are noted herein, and that opinions expressed herein are independent and un-biased. Fred L. Thrall, LLC __________________________ By: Fred L. Thrall, Manager


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PROPERTY DESCRIPTION & OBSERVATIONS

Consultant performed on January 23-24, 2008 a walk-through survey (non-intrusive visual inspection) of the Property. A description of the improvements, and a listing of physical deficiencies observed is as follows; issues deemed serious (requiring immediate attention to prevent significant deterioration or to mitigate occupant safety or health liabilities, or involving considerable expense) are highlighted in Bold. SITEWORK: Description: Site is 5.58 acres and is rectangular in shape; it is currently developed as a multi-tenant light industrial facility. The Property is located on the SE corner of the intersection of XXXXXXXXXXXXXXXXXXXXXXXXXX in the City of XXXXXXXXX, Colorado; it is zoned BLI (Business/Light Industrial) and appears to be developed in accordance with this zoning. Vehicle access to the site is from XXXXXXX north of the property and XXXXXXXXX south of the property. Site is generally flat. Storm drainage is by surface runoff and underground storm sewer, leading to a concrete paved ditch along the south side of the property. Parking areas are typically asphalt pavement. There is concrete pavement at the recessed loading docks on the east & west sides, and at the loading and picnic areas at the NE corner of the building. Number of parking spaces: unknown (areas not striped). Parking appears to be SUFFICIENT for the current use of the building. Curbs and sidewalks are concrete. Landscaping consists of grass, gravel, trees & shrubs with an irrigation sprinkler system. There are concrete retaining walls maximum 48” high at the recessed loading docks on the east & west sides of the building. There is a monument sign (painted steel and Plexiglas) at the NW corner of the property. There is a 6’ high painted wood screen fence at the picnic area at the NE corner of the property. Physical deficiencies or concerns: 1. Asphalt pavement exhibits considerable cracking and spider-cracking. Remove and

replace spider-cracked areas; seal all cracks. Recommend seal-coating the entire asphalt lot to prolong useful life of the pavement.

2. Pavement striping has deteriorated. Re-stripe. 3. Designated parking spaces and curb cuts for handicap access were not observed. Designate

the required number of parking spaces, with appropriate signage, when re-striping the pavement; construct curb cuts as needed.

4. Concrete pavement exhibits minor cracking. There is surface spalling at the picnic area. Seal cracks. Recommend grinding picnic slab and applying a surface sealer.

5. Water appears to pond at the storm sewer catch basin at the west side; the catch basin inlet is set 18” above the adjacent pavement grade. This does not appear to be purposeful storm-water detention. Recommend re-grading to achieve positive drainage when the asphalt pavement is replaced.


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6. There is serious wash-out of earth at the south side of the parking lot; 8” round drainage pipes have apparently been added, but do not solve the problem. Concrete paved ditch is being under-mined. Re-grade as needed. Recommend constructing concrete swales to direct water to the paved ditch.

7. There is minor cracking of the concrete sidewalks. Seal the cracks and monitor for displacement.

8. Concrete sidewalk has cracked and heaved (a) at the north center entry and (b) off the NE corner of the building; several sections of the concrete sidewalk on the south side have heaved or sunk. Replace sidewalk as needed.

9. Guardrails at retaining walls at recessed docks are loose and/or damaged in places; paint coating has deteriorated. Repair railings and repaint.

10. Guardrails at retaining walls at recessed docks do not meet current code (’03 IBC Section 509.3 requires maximum 4” space between rails). These rails may need to be upgraded for liability reasons or if the building is substantially remodeled.

11. The top step at the south entrance to Reliant Manufacturing is 1 ¼” greater than the other; this is a trip hazard and does not meet current code (’03 IBC Section 1003.3.3.3 allows a maximum 3/8” difference). Re-construct steps.

12. Gate at the wood picket fence is damaged and dislodged. Repair. UTILITIES: Description: Potable water service is provided by the City of XXXXXXXXX from an in-ground meter vault in the turf on the north side; it enters the building through 1 meter into the Fire Sprinkler Room in the center north end. There is one fire hydrant nearby at the NE corner of the Property. Sanitary sewer apparently exits the building on the south side and runs to public sewer provided by the City of XXXXXXXXX along Rogers Road. Natural gas is supplied by Xcel Energy to the building through one meter (100 psi) located at the NE corner of the building. Electrical service is provided by the City of XXXXXXXXX underground from two 3-phase pad-mounted transformers at the East side of the building; the older transformer (#3965) serves a meter and the MDP (a 5-section 2400 amp 240 volt switchgear) located in the Main Electric Room in the center of the building; the newer transformer (#3234) serves a meter and a 2-section 1200 amp 480 volt switchgear located on the exterior east wall of the building. Telephone service is provided by QWEST underground from two pedestals at the NW and SW corners of the property; service enters the building to two D’Marks. Physical deficiencies or concerns: None.


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BUILDING EXTERIOR: Description: The building is a one-story structure of approx. 73,383 gross square feet (per XXXXXXXX County Assessor), currently used as a light industrial building. It was apparently originally constructed in 1979; the south wing was reportedly added several years thereafter. Exterior walls are:

• Painted brick (north center wing) • Decorative split-face concrete masonry unit (CMU) • Painted CMU (south side).

Soffits are painted plywood. Windows are fixed ¼” plate glass (some tempered) set in 4” dark bronze anodized aluminum frame (north center wing).

Exterior doors are:

• (Entry doors) ¼” tempered glass set in narrow-stile dark bronze anodized aluminum door in 4” aluminum storefront frame with (a) push-pulls and deadbolt or (b) rim panic exit device, overhead closer, threshold & weatherstrips

• (Service doors) 1 ¾” painted hollow metal door in painted welded steel frame with rim panic exit device, overhead closer, threshold & weatherstrips

• (Overhead doors) painted sectional steel door, manually-operated, at grade (one @ 10’x12’, one @ 8’x10’, one @ 8’x8’)

• (Overhead doors) painted sectional steel door, manually-operated, with bumpers and leveler at 4’ high dock (one @ 10’x10’)

• (Overhead doors) painted sectional steel door, electrically-operated, at grade (two @ 8’x12’)

• (Overhead doors) painted sectional steel door, electrically-operated, with bumpers, dock shelter and leveler at 4’ high dock (one @ 10’x12’).

Physical deficiencies or concerns: 1. There are numerous cracks in the masonry (brick & CMU) walls. Seal cracks and monitor

for recurrence. 2. Openings have been cut in the exterior CMU: (a) for a door on the west side, (b) for a louver

on the south side. No lintels were installed; no cracking was observed. Monitor. 3. Water damage to the paint coating on exterior CMU was observed in several places.

Eliminate source of water entry (see Roofing), then repaint as needed. 4. Caulking in control joints in CMU walls exhibits considerable deterioration. Re-caulk. 5. Paint coating on exterior steel (hollow metal doors & frames, fascia and gable trim, gutters &

downspouts) has deteriorated; rusting was observed. Repaint. Several hollow metal doors & frames may require replacement.

6. Old aluminum storefront framing and VCT flooring is exposed at the overhead door at the east side, south end. Remove.

7. Vinyl window glazing bead is loose, missing or shrunken at windows at the north center wing. Replace vinyl window glazing bead as needed. Recommend caulking over the bead at window sill.


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8. In the winter, the sidewalk at the north entry to the Restore space reportedly heaves; this causes the glass & aluminum entry doors to bind and reportedly break. Recommend further investigation to direct water away from this entry and eliminate the sidewalk heave.

9. Exterior entry door to the Colorado VNet space does not close properly. Repair. 10. Panels of overhead door at west side north end are damaged; wood weatherstrips are also

damaged. Replace damaged parts as needed. 11. There is no fire department emergency key box. Recommend one be installed to facilitate

emergency response. FOUNDATION & STRUCTURE: Description: Underground foundations were not visible. No basement exists. 1st Floor slab is concrete on grade, unknown thickness. Exterior walls (non-bearing) are concrete masonry units (CMU); 4” thick (north wing), 8’ thick (south wing). CMU is supported by horizontal steel purlins at 6’+/- o.c. attached to the pre-engineered steel frames. Exterior walls (bearing) of the north center wing are 8” thick masonry (brick and CMU). Roof structure is typically metal roof deck on steel channel purlins at 5’+/- o.c., bearing on pre-engineered steel frames (columns and beams) at 25’+/- o.c. Roof structure of the north center wing is 1 ½” Type B metal roof deck on 2x10 wood joists @ 24” o.c., bearing on exterior masonry walls. Physical deficiencies or concerns: None.


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ROOF: Description: Flat roof (north center wing, and the juncture between the north & south wings): Roofing system is a fully-adhered EPDM single-ply membrane over an unknown amount of board insulation. Membrane appears to be 15 years old; it is a replacement roof over the original. This type of roof system usually has a 20-25 year expected life span. Penetrations in the membrane are sealed with clamped rubber boots, pitch pockets and sheet metal cones covered with membrane. Parapet walls of flat roofs are 4” to 28” high and typically constructed with base flashing of adhered EPDM membrane turned up 8” under a termination bar, with exposed masonry above. Drainage of the north center wing roof is at ¼” per foot to 4 overflow scuppers, which are connected to exterior open downspouts which drain to the surface of the site; at the juncture between the north & south wings drainage is to 3 roof drains, which drain through interior piping to the surface of the site. HVAC units drain their condensate directly onto the roof. Sloped roof: Roofing is painted steel decking. Roofing appears to be original to the building; this type of roof system usually has a 40-50 year expected life span. Pitch is approx. 1-on-12. Penetrations are sealed with sheet metal cones. Spray foam has been applied at the lower edges and mechanical areas of the north wing, apparently as an attempted leak repair. Sloped roofs drain to exterior painted steel gutters with exterior open & closed downspouts which drain to the surface of the site. HVAC units drain their condensate directly onto the roof. There is a 54” to 72” high painted metal deck screen around HVAC equipment on the north wing, supported by painted steel framing. Physical deficiencies or concerns: 1. Flat roof membrane over north wing appears to be at the end of its useful life. Open

seams were observed; considerable evidence of leak problems was observed. EPDM membrane exhibits shrinkage, visible by loss of adhesion of the uncured base flashing from parapet walls and curbs; this indicates failure of the base securement fasteners, which makes the flashing subject to damage and serious leaks. Tear-off and replace this roof.

2. Metal deck roofing at low angle is typically not watertight; this type of roof system is not considered appropriate for office use or storage of high-value materials. Evidence of leak problems was observed. Install an elastomeric roof system, or at a minimum an elastomeric coating over all joints and screws in the metal decking.

3. There is no overflow protection for the flat roof at the juncture between the north & south wings; should the drains become clogged, water could pond in this area and cause a structural failure. Install overflow drains with separate piping.

4. Mortar cap on parapet walls on the north center wing is cracked; this cap is not waterproof. Install a galvanized steel coping atop the parapet walls.

5. There is no cricket above the roof curbs at two Carrier HVAC units on the sloped roof of the north wing; crickets are standard practice where the curb is wider than 30”. Install crickets.

6. Space beneath exterior ductwork to rooftop HVAC units on the north center wing could allow pigeons to inhabit. Install screens.


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INTERIOR: Description: The building is used primarily for offices, R&D and warehouse retail, and is currently approx. 90% occupied. Office spaces: Floors are typically glue-down carpet; some areas have vinyl composition tile (VCT). Walls are typically painted drywall with vinyl base. Exterior walls may be insulated; this was not observed. Ceilings are typically 2’x4’ suspended acoustic tile 7’-9” to 9’-0” high. Bathrooms: Floors are typically VCT. Walls are painted drywall with ceramic tile base and a ceramic tile wainscot 50” high. Ceilings are typically painted drywall 7’-9” to 8’-8” high. Larger bathrooms have floor-mounted enameled-steel toilet partitions. Warehouse areas – north wing: Floors are typically painted or bare concrete. Walls are painted CMU or drywall with some vinyl base. Exterior walls do not appear to be insulated. Ceilings are unpainted exposed structure 13’to 17’ high. Roof insulation is 2” thick vinyl-faced fiberglass batts. Manufacturing areas – south wing: Floors are VCT or painted concrete. Walls are typically painted drywall with some vinyl base. Exterior walls appear to be insulated with 3 ½” R-11 un-faced fiberglass batts. Ceilings are painted exposed structure 16’to 20’ high. Roof insulation is 6” thick vinyl-faced fiberglass batts. Interior doors are:

• 1 ¾” painted or stained solid core wood door in painted steel or wood frame with light-duty cylindrical (some lever-handles) lockset US26D finish

• 1 ¾” painted hollow metal door in painted steel frame with light-duty cylindrical lockset US26D finish.

Physical deficiencies or concerns: 1. There is minor cracking of the exposed concrete floor; no significant displacement was

observed. This is not considered to be of a structural nature. Seal cracks and monitor for future movement.

2. Tenant finishes will likely need to be renewed from time-to-time, particularly as leases expire. This issue is beyond the scope of this report, as it should be covered by a separate tenant finish allowance.

3. Roof insulation and wall insulation in the north wing appear to be minimal or non-existent. This may cause higher-than-normal utility costs. Recommend installing additional insulation as tenant finishes are renewed.

4. Vinyl-faced ceiling insulation in warehouse and manufacturing areas has been damaged in places. Repair.

5. Stained ceiling tiles in office areas indicate roofing leaks. Replace stained tiles and monitor for recurrence.

6. Carpet throughout the south wing is worn and buckled. Plan on replacement within the next 5 years.

7. Paint coating on concrete floors has deteriorated; VCT in vacant suite is damaged. Renew.


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8. There is cosmetic damage to walls, base, ceilings, doors & frames. Repair. 9. Materials are stored in front of the switchgear and electric panels in Reliant Manufacturing

and Crescent Electric spaces; tenant’s compressor is located in front of electric panels in Main Electric Room. This violates code (’02 NEC Section 110.26A), which requires 3’ clearance. Require tenants to relocate materials and compressor.

10. Several interior doors were observed to not close properly; door from loading dock west side separating Reliant and CO VNet spaces is not secure. Repair.

11. Door stop were observed to be missing in various areas; walls are damaged. Install door stops as needed.


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HVAC (Heating, Ventilating & Air Conditioning): Description: Heating and cooling is provided to the building primarily by roof-mounted package HVAC units (RTU’s) with R-22 refrigerant-type cooling and an integral gas-fired furnace for heating. Supply air is provided from the RTU’s via sheet metal and insulated flexible ducting. Return air is provided to the RTU’s via sheet metal ducting, except Reliant Manufacturing offices which utilize the ceiling plenum. RTU’s are controlled by Honeywell and Dayton thermostats. The following units were observed on the roof: North center wing:

• Lennox RTU 4-ton cooling capacity with outside air intake, 80 MBTUH heating capacity, 208 volt 3-phase, manufactured ca. ‘93; serves Crescent Electric offices

• Lennox RTU 4-ton cooling capacity with outside air intake, 80 MBTUH heating capacity, 208 volt 3-phase, manufactured ca. ‘93; serves Restore offices

North wing: • Carrier RTU 7-ton cooling capacity with economizer, 92 MBTUH heating capacity,

208V 3Φ, manufactured ’00; serves Crescent Electric warehouse • Carrier RTU 7-ton cooling capacity with economizer, 92 MBTUH heating capacity,

208V 3Φ, manufactured ’00; serves Reliant Manufacturing South wing:

• (#1) Lennox 10-ton 2-stage cooling capacity with economizer, 192 MBTUH heating capacity, 208V 3Φ, manufactured ’06; serves Colorado VNet

• (#2) McQuay 10-ton 2-stage cooling capacity with economizer, 159 MBTUH heating capacity, 208V 3Φ, manufactured ca. ’93; serves Reliant Manufacturing

• (#3) Lennox 10-ton 2-stage cooling capacity with economizer, 192 MBTUH heating capacity, 208V 3Φ, manufactured ’06; serves Reliant Manufacturing



• (#6) Lennox 10-ton 2-stage cooling capacity with economizer, 192 MBTUH heating capacity, 208V 3Φ, manufactured ’06; serves Reliant Manufacturing

• (#7) McQuay 10-ton 2-stage cooling capacity with economizer, 159 MBTUH heating capacity, 208V 3Φ, manufactured ca. ’93; serves vacant suite

• (#8) McQuay 12.5-ton 2-stage cooling capacity with economizer, 182 MBTUH heating capacity, 208V 3Φ, manufactured ca. ’93; serves vacant suite.

Heating only is provided to the warehouse area of the Restore space by an interior gas-fired furnace or unit heater, suspended from the ceiling, controlled by a unit thermostat. The following units were observed:

• Carrier indoor furnace unit, approx. 200 MBTUH heating capacity, manufactured ca. ‘04 • Lennox unit heater, 215 MBTUH heating capacity, manufactured ca. ‘04.


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Additional heating is provided to the warehouse area of the Crescent Electric space by gas-fired infrared radiant tube heaters or unit heater, suspended from the ceiling, controlled by unit thermostats:

• (2 each) Re-Verber-Ray radiant tube heater, approx. 80 MBTUH heating capacity • Modine unit heater, approx. 75 MBTUH heating capacity.

Additional cooling is provided to the north wing by two evaporative cooling units (swamp coolers) located on the roof. Capacity calculations (not including evaporative coolers): Cooling: Approx. 50,000 SF / 104.5 tons = 1 ton per 478 SF INSUFFICIENT range for

this type of building Heating: Approx. 2,388 MBTUH / 73,383 SF = 32.5 BTUH per SF MARGINAL range

for this type of building. Physical deficiencies or concerns: 1. Cooling capacity appears to be insufficient for normal usage. Recommend further

investigation by a licensed mechanical engineer to determine Client’s needs. 2. The 2 Lennox RTU’s on the north center wing are in disrepair, and are probably at the

end of their useful lives. Further, the 5 McQuay RTU’s appear to be 15+/- years old, and may be nearing the end of their useful lives. Replacement parts will become difficult to obtain; further, production of equipment utilizing R-22 refrigerant is being phased out by 2010. Replace RTU’s as needed.

3. Tenant in Colorado VNet space complained that the RTU serving his space has insufficient heating and cooling capacity. Recommend further investigation.

4. The refrigerant condenser fins of rooftop units on north center wing have considerable hail damage; in addition, the Carrier and McQuay units have no hail screens. Comb-out the damaged fins. Recommend installing hail screens on cooling units as needed to protect condenser fins.

5. Carrier RTU’s do not have a condensate drain extension; without an extension and a p-trap, suction back-pressure can cause water to flow back into the unit, causing a leak inside the building. Install an extension with p-trap on each Carrier unit.

6. Filter/bird screen on economizer on RTU #1 is loose. Repair. 7. Exterior ductwork on Lennox RTU’s on the north center wing exhibits serious damage; this

likely allows water leakage into the building. Repair ductwork. 8. Exhaust fan(s) in bathrooms in Colorado VNet space are reported to be inoperable. Repair or

replace. 9. Exhaust fan on west wall of Colorado VNet space is loose; fan appears to serve no current

purpose. However, it is reported that dust blows in through the fan opening onto high-value electronic materials. Recommend fan be removed and the opening sealed.

10. Evaporative cooling units do not appear to have been winterized; water lines are connected, and units are not covered to prevent heat loss. Winterize these units.


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PLUMBING: Description: Potable water service enters the building in a 1 ½” copper pipe into the Fire Sprinkler Room in the north center wing through 1 meter, a gate valve and a backflow preventer. Backflow preventer was last inspected 5/07. Interior water supply piping is copper, not insulated. Hot water is provided by:

• Gas-fired water heater, GE 40-gallon capacity, manufactured ’01, located in the Restore suite

• Electric water heater, Bradford-White 50-gallon capacity, 208V 3Φ, manufactured ’04, located in the vacant suite

• Various electric water heaters, approx. 6 gallon capacity, above the ceiling at tenant bathrooms (not observed).

Waste & vent piping above grade is Tyler no-hub cast iron and Schedule 40 PVC. Interior roof drain piping is Schedule 40 PVC, not insulated. Plumbing fixtures are:

• Bathroom sinks are typically vitreous china in plastic laminate countertop with single or double-lever faucet (sinks in Restore suite are enameled steel)

• Kitchen sink in CO VNet space is stainless steel with double-knob faucet • Toilets are typically commercial tank-style (toilets in Restore space are floor-mounted

with Sloan flush valve) • Urinals are vitreous china with Sloan flush valve • Water cooler in vacant suite is Oasis

Bathrooms in most suites appear to be in compliance with all requirements of Title III of the Americans with Disabilities Act (ADA); however, bathrooms in Restore suite are not in full compliance. Natural gas service extends in black iron piping from the exterior meter (100 psi) at the exterior NE corner of the building, up into the ceiling space, extending down to the furnace units and gas-fired water heater, and through and along the roof to each RTU. Fire sprinkler service enters the building in a 4” service into the Fire Sprinkler Room in the north center wing, through two 4” OS&Y valves with tamper switch, and distributes in 2 zones through flow switches throughout the building using black iron pipe. The Fire Department pumper connection is located on the north side of the building. System was last serviced and tested 5/07 by Freedom Fire Protection, Longmont, CO. There is a process air system throughout the Reliant Manufacturing, CO VNet and Crescent Electric spaces, served by a compressor located in a room adjacent to the Main Electric Room. Physical deficiencies or concerns: 1. Bathrooms in Restore suite are not in compliance with ADA requirements, specifically with

regard to wheelchair space, grab bars, under-sink insulation, and toilet-type. If a complaint is lodged or major renovations are done, it is likely that upgrading of toilet facilities will be required.


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2. Electric water heaters serving tenant bathrooms may be approaching the end of their useful lives; expected life span is 12+/- years. Replace water heaters as needed.

3. Pressure-release piping from the water heater in the Restore suite drains onto the VCT floor; there is no floor drain nearby; this is in violation of code (’03 UPC Section 508.4). Install a drain pan.

4. Water heater in Colorado VNet space is reportedly undersized for the demand. Recommend further investigation.

5. Shower drain in Restore suite reportedly does not drain properly; further, sewer gas is reported from adjacent mop basin. Repair.

6. There is only one gas meter for the entire building. This means that tenant utility costs (space and water heating) must be pro-rated and billed by the building management.

7. Several sprinkler head escutcheons are missing. Install escutcheons.


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ELECTRICAL: Description: There are two electrical services to the building. The older service extends from a pad-mounted transformer (#3965) at the east side of the building, through a single exterior meter to the MDP switchgear located on the Main Electric Room in the center of the building as follows: Main Switchboard MDP: General Electric 5-section 2400 amp 240 volt 3-phase 4-wire switchboard, as follows: 1. Section 1: Current transformer (CT) cabinet 2. Section 2: Main Service Disconnect 1200A 240V 3Φ 4W disconnect serving MDP2 3. Section 3: MDP2 with disconnects as follows:

• 200A disconnect (fused @ 200A) for Panel LD o Panel LD: GE 400A 120/208V 3Φ 4W 30-circuit panel in Restore suite

• 200A disconnect (fused @ 200A) for bus duct • 200A disconnect (fused @ 200A) for Panel LG

o Panel LG: GE 225A 120/208V 3Φ 4W 30-circuit panel in Main Electric Room • 200A disconnect (fused @ 200A) for Panel LA

o Panel LA: GE 225A 120/208V 3Φ 4W 30-circuit panel in Main Electric Room • 400A disconnect (fused @ 400A) for Panel E

o Panel E: GE 400A 120/208V 3Φ 4W 42-circuit panel in Reliant space • 400A disconnect (fused @ 400A) for Panel C

o Panel C: GE 400A 120/208V 3Φ 4W 42-circuit panel in Reliant space 4. Section 4: Main Service Disconnect 1200A 240V 3Φ 4W disconnect serving MDP1 5. Section 5: MDP1 with disconnects as follows:

• 200A disconnect (fused @ 200A) for Panel A o Panel A: GE 200A 120/208V 3Φ 4W 42-circuit panel in vacant suite

• 200A disconnect (fused @ 200A) for Panel D o Panel D: GE 200A 120/208V 3Φ 4W 30-circuit panel in Reliant space

• 200A disconnect (fused @ 200A) for Panel B o Panel B: GE 200A 120/208V 3Φ 4W 42-circuit panel in Reliant space

• 200A disconnect (fused @ 200A) for Panel LB o Panel LB: GE 225A 120/208V 3Φ 4W 30-circuit panel in Restore suite

• 400A disconnect (fused @ 400A) for Panel LF o Panel LF: GE 400A 120/208V 3Φ 4W 27-circuit panel in Main Electric Room

• 400A disconnect (fused @ 250A) for Panel LE o Panel LE: GE 400A 120/208V 3Φ 4W 30-circuit panel in Main Electric Room

The newer service extends from a pad-mounted transformer (#3234) at the east side of the building, through a single exterior meter to a switchboard located on the exterior east wall of the building, as follows: Main Switchboard: Siemens 2-section 1200 amp 480 volt 3-phase 4-wire switchgear, with Main Disconnect = 1200A; this serves switchgear SDP: 1. Switchgear SDP: Siemens 1-section 1200A 480V 3Φ 4W switchboard located in center of

south wing (Reliant space), with disconnects as follows: • 100A disconnect for air compressor • 100A disconnect (fused @ 100A) for Subpanel H2

o Subpanel H2: Siemens 250A 277/480V 3Φ 4W 18-circuit panel in Reliant space


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• 100A disconnect for Fuji machine • 100A disconnect (fused @ 100A) for Panel F

o GE 75 KVA 480/240V transformer serving Panel F: GE 200A 120/208V 3Φ 4W 42-circuit panel (MB = 200A) in Reliant space

• 200A disconnect for HVC Oven • 200A disconnect (fused @ 200A) for Panel H1

o Panel H1: Siemens 250A 277/480V 3Φ 4W 42-circuit panel (MB = 225A) in Reliant space

• 200A disconnect for Senseby machine • 600A disconnect (fused @ 600A) for SWGR

o SWGR: Siemens 1-section 600A 277/480V 3Φ 4W switchboard located in center of south wing (Reliant space), with disconnects as follows: 30A disconnect for Fuji machine 20A disconnect for Fuji machine 125A disconnect (fused @ 125A) for Panel G

o EGS 75 KVA 480/240V transformer serving Panel G: Siemens 200A 120/208V 3Φ 4W 42-circuit panel (MB = 200A) in Reliant space

110A disconnect for machine 125A disconnect for machine 200A disconnect for Oven

Wiring is aluminum for large sizes (panel feeds) and copper for smaller sizes, in conduit and flexible metallic cable (BX). There is 240V bus-rail in Restore, Crescent Electric & Reliant spaces. There is a system ground to copper water pipe at the water service entrance. Most outlets near sinks in bathrooms are GFCI protected; however, in the Restore and Crescent Electric office spaces, outlets are not GFCI-protected. Exterior lighting is provided by:

• High-intensity discharge (HID) wall packs mounted on the building • Incandescent wall sconces at doors

Interior light fixtures are typically:

• 2’x4’ 3-tube 34W T-8 recessed fluorescent troffer with flat acrylic lens (south wing) • 2’x4’ 4-tube 40W T-12 recessed fluorescent troffer with flat acrylic lens (north wing) • 8’ long 2-tube 40W T-12 exposed fluorescent fixture • HID high-bay fixture

Line-voltage exit lights and line-voltage emergency lighting have been installed. There are two telephone services to the building. One service enters the building to a D’Mark in the Fire Sprinkler Room in the north center wing, onto #110 blocks, then via UL-rated cabling to RJ-11 voice outlets, presumably throughout the north wing. The other service enters the building to a D’Mark in the Server Room in the Reliant space in the south wing, onto #110 blocks, then via CAT-3 UL-rated cabling to RJ-11 voice outlets, presumably throughout the south wing. Several tenants have a local Ethernet data network, extending from #110 blocks or patch panels via CAT-5 UL-rated data cabling to RJ-45 data outlets in individual tenant suites.


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There is an electronic fire alarm system, complete with pull stations, horn/strobe alarms, a limited number of smoke detectors, and a FireLite control panel located in the north center entry vestibule; Consultant was unable to determine if the system is remotely-monitored. Capacity calculation: ((2400 amps x 240 volts) + (1200A x 480V)) x 1.732 = 1995 kilowatts 1995 kilowatts / 73,383 SF = 27.2 watts per SF SUFFICIENT range for this type of building Physical deficiencies or concerns: 1. There are only two utility company electric meters for the various tenant suites. This

means that tenant utility costs (cooling, ventilation, lighting and equipment loads) must be pro-rated and billed by the building management.

2. Electrical distribution appears to be commingled between the various building quadrants; numerous interior remodels appear to have been performed without accompanying changes to the electrical system. Recommend performing an exhaustive survey under the direction of a licensed master electrician, and re-configuring electrical circuitry so that all areas are served by the appropriate panel.

3. Aluminum wiring has been used for larger-size feeders. This is allowed by code, but requires more diligent maintenance to ensure that wiring connections remain tight. Recommend a regular maintenance schedule be established for this wiring.

4. Numbering of all panels and service disconnects is confusing; this is particularly disturbing as there are two separate services in the building. Recommend establishing a numbering system that accurately reflects current distribution.

5. Panels are not completely labeled as to current circuits; this is in violation of code (’02 NEC Section 110.22). Re-label panels as needed.

6. Breaker space cover plate is missing in Panel B; this is in violation of code (’02 NEC Section 110.12). Install cover plate.

7. Active disconnect switch for old evaporative cooler on the roof of the north wing is laying on the roof. Install this switch on a support.

8. Electrical outlets in bathrooms in the Restore and Crescent Electric office spaces are not GFCI-protected; this is required by code (’02 NEC Section 210.8A7). Replace outlets as needed.

9. Some of the cord drops (SO cord to a 4-plex outlet) in the Reliant space do not have a strain relief. Install strain reliefs as needed.

10. Numerous outlets in Restore space are reportedly not working; outlets in the CO VNet space reportedly are overloaded. Investigate and repair.

11. Numerous lamps are out throughout the building. Replace lamps as needed. 12. Lenses are broken in 2 exit lights. Replace lenses as needed. 13. Communications cabling is laid directly on the ceiling tiles in the north center wing.

Suspend cabling from structure.


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LIMITATIONS OF OBSERVATIONS 1. This Property Condition Assessment is conducted in general accordance with ASTM

Standard E2018-01 for Property Condition Assessments. This survey will not identify every deficiency in the property; unexpected repairs should still be anticipated. This Property Condition Assessment should not be considered as a guarantee or warranty of any kind.

2. The scope of the walk-through survey is the visually-accessible components of the

improvements to the Property. The survey is not a technically-exhaustive investigation. A representative sample of building components are viewed in areas that are accessible at the time of the survey. Many building components are concealed behind finished surfaces, furniture and/or storage, and cannot be observed. No dismantling or destructive testing of building components, or test operation of building equipment and systems is performed.

3. Environmental comments provided herein do not constitute a Phase I investigation, and as

such does not qualify the Client for the “Innocent Landowner” defense. While Consultant may comment upon environmental hazards observed, this inspection and report does not qualify as a certified mold, asbestos or radon survey.

4. This survey constitutes a Tier I level of ADA due diligence: visual accessibility survey only. 5. This Consultant does not purport to be registered or licensed as a professional engineer or

architect, industrial hygienist, building code specialist, or scientific testing agency. This Property Condition Assessment is not to be construed as a building code, safety, regulatory or environmental compliance inspection.

6. Not included in the scope of this survey are services such as:

a. Document review of property history or seismic hazard b. Assessment of geological, geotechnical or hydrological conditions c. Calculation of structural capacities or adequacy d. Detailed calculation of heating/cooling capacities, adequacy or efficiency e. Detailed calculation of electrical capacities or adequacy f. Assessment of environmental hazards g. Analysis and testing of indoor air quality, including the presence of carbon monoxide,

carbon dioxide and radon gas h. Sampling and laboratory analysis to determine the presence of hazardous materials i. Testing of any nature, including domestic water quality, fire sprinkler systems, gas leaks

and piping condition, or test operation of any mechanical, electrical, plumbing, kitchen, laundry or other equipment

j. Assessment of any specialized systems, such as security systems, water conditioning systems, pools, spas, and the like.


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CONSULTANT’S QUALIFICATIONS: FRED L. THRALL EDUCATION:

• BS in Civil Engineering (structural engineering major): Virginia Tech • Masters in Business Administration (MBA): George Mason University • Training in environmental inspections: Stewart Environmental • Completion of Commercial Inspection Course by Inspection Training Associates

ACCREDITATION: • LEED 2.0 Accredited Green Building Professional: US Green Building Council

EXPERIENCE: 35+ years experience in all phases of commercial real estate development.

• Commercial Building Consultant, advising clients in the purchase & construction of commercial buildings from 700 SF to 400,000 SF such as:

o 820 Main Street, Longmont, CO (66,000 SF historic school building built 1926) o 710-714 Golden Ridge Rd., Golden, CO (24,000 SF shopping center) o 1285 S. Fordham, Longmont, CO (102,000 SF manufacturing facility) o 175 S. Union Blvd, CO Springs, CO (270,000 SF convalescent care facility) o 5495 Arapahoe Ave., Boulder, CO (54,000 SF office building)

• Asset Manager of portfolio of 1,700,000 SF (42 buildings, 75 tenants) of light manufacturing & office space. Conducted complete inspections annually of each building.

• Leasing Manager; handling commercial lease transactions of up to $85,000,000 in value such as:

o Maxtor Corporation (450,000 SF office and R&D) o Gart Sports (25,000 SF retail) o Office Depot (28,000 SF retail)

• Partner in a real estate development firm, creating projects up to $50,000,000 in value including:

o One Bethesda Center (a 12-story 340,000 SF urban mixed-use center) o 1750 Old Meadow Rd. (a 7-story 200,000 SF office building)

• Vice President / Project Manager of commercial construction firms, building projects such as:

o Kettering Jr. High School (135,000 SF) o The Barns at Wolf Trap (performing arts complex) o Juvenile Detention Center (State of Maryland) o Landover Industrial Center (225,000 SF)


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