Expert Guidance: Commercial Property Inspection in San Diego County

San Diego County is home to a thriving commercial real estate market, with office buildings, retail spaces, hotels, warehouses, and more available for businesses to lease or purchase. As an experienced Commercial Inspection San Diego, I’m often asked by buyers, sellers, and tenants to assess the condition of a building before a transaction occurs.

In this blog post, I’ll share my insights into the commercial property inspection process, current market conditions in San Diego County, and what to look for when evaluating a commercial space. My goal is to provide prospective buyers, sellers, landlords, and tenants with expert guidance to make informed decisions about commercial real estate.

Overview of the Commercial Inspection Process

A commercial property inspection is a detailed examination of the physical condition of a building and its major systems. As the inspector, I will visually assess the roof, facade, foundation, plumbing, electrical, HVAC, and more. The inspection typically takes 2-4 hours for a moderate sized property like a 20,000 square foot office building.

My report will identify defects, code violations, deferred maintenance issues, and estimate the cost of necessary repairs. This informs negotiations about purchase price, repairs required by the seller, or lease terms. The report is not meant to be exhaustive but to give a general sense of the property’s condition.

Current Market Conditions in San Diego County

The commercial real estate market in San Diego County has been resilient, though vacancy rates increased slightly during the pandemic. Here are some trends I’m seeing:

Industrial Space – Strong demand continues for warehouses and logistics facilities, especially with e-commerce growth. Vacancy rates are around 5%. Rents grew over 10% in 2021. New construction is active.

Office Space – Office vacancies rose to around 15% during the pandemic as companies delayed leasing. Sublease space increased as firms downsized. Market conditions are improving in 2023-2024 as employers finalize return-to-work plans.

Retail Space – Retail took a hit early in the pandemic but rebounded once restrictions lifted. Vacancy rates are stabilizing around 5%. Restaurant spaces are in demand again. Well-located shopping centers continue to attract tenants.

Multifamily – The apartment sector is thriving with vacancies under 5%. Rents are spiking across San Diego County, leading developers to build thousands of new units. Investment activity is robust for apartment complexes.

Hospitality – Hotels bounced back in 2021-2022 as travel resumed. Occupancy rates now exceed 70% for most of the year. Revenue per available room has recovered to near pre-pandemic levels.

Medical Office – Medical office space has fared well throughout the pandemic, though some smaller clinics shuttered. Larger health systems continue expanding their real estate footprints.

This points to a generally healthy commercial real estate environment in San Diego County currently, though each property has its own unique considerations.

What to Look for in a Commercial Property Inspection

As an experienced commercial inspector, I have a detailed process for examining all aspects of a property. Here are some key areas I pay close attention to:

Exterior

• Is the roof free of leaks and in good repair? Are there issues like cracked membrane, poor drainage, or areas needing re-sealing?
• Does the facade show signs of weathering, water intrusion, or structural movement that could indicate foundation problems?
• Are windows and doors in good operating condition? Is exterior lighting functional?
• Are sidewalks, parking areas, landscaping, and drainage systems properly maintained?

Interior Finishes

• What is the condition of flooring, walls, ceilings, doors, and windows inside the building? Is there water damage or evidence of past leaks?
• How old are finishes like carpeting and paint? Do they need replacement or refurbishment?
• Are there signs of deterioration that could impact occupant health like mold growth?

Plumbing

• How old are systems like piping, water heaters, and fixtures? Are upgrades needed?
• Do bathrooms and kitchen areas function properly with adequate pressure and drainage?
• Are there leaks or corrosion visible? Have freezing pipes been an issue causing damage?

Electrical

• Is the main panel and wiring adequately sized for the building’s usage needs? Are upgrades recommended?
• Are outlets properly grounded and GFCI protected in wet areas?
• Does lighting function properly in all interior and exterior spaces?

HVAC

• What is the condition of heating and air conditioning equipment? How old are units?
• Do HVAC systems properly heat and cool the occupied spaces? Are upgrades or replacements needed?
• Is ductwork intact and adequately insulated? Are grills and vents clean?

Fire & Life Safety

• Are fire sprinkler and alarm systems up to code and actively monitored? Have they been properly inspected and serviced?
• Are exit paths clearly marked and unobstructed? Do emergency lighting, signage, and door hardware function properly?
• Is the required number of fire extinguishers present with current inspection tags?

Compliance Issues

• Are there any code violations that need to be addressed like illegal partitions or unpermitted remodeling?
• Does the building comply with current seismic and ADA accessibility standards?
• Are there any environmental issues like asbestos, lead paint, or mold that require abatement?

Thoroughly inspecting these areas and others will help identify deficiencies, maintenance needs, and capital improvements required to keep the building functional and compliant with regulations.

Implications of Common Inspection Findings

Inevitably, the commercial inspection will reveal some defects and areas needing improvement. As the inspector, I need to clearly communicate the implications to clients. Here are some examples:

Minor roof leaks – These may not require full replacement but spot repairs. They suggest the overall roof is aging and nearing replacement. Cost could be $5,000-10,000.

HVAC System Near End of Life – If cooling equipment is 15+ years old, it likely needs replacement within 5 years. Cost could easily exceed $50,000. Life safety and utility costs are impacted.

Deferred Maintenance on Finishes – If carpeting, wall paint, bathroom finishes are worn or out of date, refreshing them will bring higher rents and occupancy. Budget $10-20,000.

Outdated Electrical Panel – This poses fire risks and limits future expansion. Upgrading to 200 amp service could cost $8,000-12,000. Non-hazardous electrical may be postponed.

Unpermitted Remodeling – If walls were added illegally, permits must be obtained. Costs depend on extent of rework needed for code compliance, potentially $20,000+.

Failure of Fire Inspection – Property must pass annual fire inspection. If deficiencies found, they should be addressed immediately for life safety reasons.

Asbestos Containing Materials – Hazardous asbestos requires abatement by licensed contractor prior to renovation. Budget $15,000+ depending on scope.

The cost implications of findings should factor into purchase price negotiation, repair requirements, and budgeting for improvements after acquisition. I help translate inspection findings into smart business decisions.

Partnering for Success

Having an experienced commercial property inspector like myself assess the true physical condition of a building provides key insights to buyers, sellers, landlords, and tenants before commitments are made. I enjoy serving as an objective third party in the transaction, providing the technical expertise to support smart decision making.

My goal is to partner for success by:

• Thoroughly evaluating all major building systems using established inspection standards and procedures
• Communicating findings in a clear, concise manner that highlights priority issues
• Advising clients on cost estimates, life safety concerns, and compliance requirements
• Helping negotiate terms to properly account for current property condition
• Supporting smooth transactions and equitable outcomes

I follow rigorous ethics that prohibit any conflicts of interest while representing my client’s interests. Feel free to contact me to discuss your upcoming commercial real estate transaction in San Diego County. I look forward to helping assess current property conditions to aid your investment decisions.