X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LOS ANGELES-Colliers International’s Real Estate Management Services has launched a new practice group called Asset Preservation Services that is designed to keep vacant commercial buildings in good working order by maintaining mechanical systems and addressing a host of other facilities management tasks that are often overlooked by owners once their tenants vacate. Peter Morris, SVP of Colliers Real Estate Management Services, tells GlobeSt.com that the company is working with building owners, lenders, special servicers and others who have responsibility for vacant buildings to ensure that those buildings do not deteriorate during the often extended periods of time that they remain vacant because of the downturn.

One of the chief concerns regarding vacant buildings is their mechanical systems, which need to be operated on a regular basis to maintain them. “Unfortunately, a lot of owners don’t realize that you can’t just mothball a building. It will start to deteriorate within 60 days,” Morris says. He explains that fluids that run through the mechanical systems of the building can settle and cause corrosion, damaging or ruining the systems if they are not operated regularly.

The list of concerns regarding vacant buildings runs the gamut from fire, life and safety systems to ensuring that they don’t get infested with pests, making sure that landscaping is maintained, providing for building security and keeping air circulating to prevent mold buildup—to name just a few. The Asset Preservation Services group has developed a proprietary inspection program covering more than 65 items that potentially need to be addressed for a typical commercial property. Among its offerings is a 24-hour emergency service response system. Owners can choose the entire menu or they can pick and choose just the items they want.

Morris points out that failing to monitor and maintain buildings can cause problems beyond just the physical deterioration of the property. One risk that owners face, for example, is that failing to maintain a property could potentially nullify the insurance coverage.

Asset Preservation Services for vacant buildings is comparable to facilities management of buildings that are occupied, Morris explains. For empty buildings, he says, “We call it facilities management lite.” That means that, although vacant buildings don’t require the level and intensity of facilities management as occupied buildings, they still need some degree of facilities management. “The point we make to owners is that, even though nobody occupies the building, you still need to manage the facility and run it,” Morris says.

Colliers Asset Preservation Services is working on properties throughout the country, having been awarded an assignment covering 20 former Mervyn’s locations in California and assignments for properties such as surplus Canadian Tire Stores in Canada and a vacant industrial property in New York state. Among the growing list of candidates for the unit’s services are vacant single-tenant retail buildings, industrial buildings, triple-net properties and auto dealerships.

Morris cites several instances where services such as Asset Preservation Services could have been beneficial. An abandoned warehouse in Los Angeles recently burned down because of a lack of regular inspections. Last winter a roof collapsed on a building in the Pacific Northwest because no one was monitoring the property. Car dealerships in San Bernardino have been tagged with graffiti with broken glass and weeds growing through the pavement and completely deteriorated landscaping.

A growing concern for owners of empty buildings and partially completed projects is that cities and other governmental jurisdictions are insisting that the owners maintain them and keep them free of garbage and debris that is often dumped there if the sites are not monitored. “More and more communities are enacting regulations that say, ‘You clean up, or we will clean up for you, and you do not want to see the price tag on that,’” Morris notes. He points out that taking good care of buildings ultimately will pay off for owners in the long run because, eventually, the properties will either be leased or sold, and the condition they are in will determine how the owner fares when that happens.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. APARTMENTS SPRING 2021Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.