Elevator due diligence or vertical transportation due diligence are evaluations which directly impact the direct bottom line of a property acquisition. This is an essential cost saving best practice should be a step when purchasing, selling or refinancing a building with elevators or escalators. It is common that a due diligence will only be done on one side of the purchaser or purchasee. Our clients present our information during negotiations and save cost at this time it is usually too late for the opposing party to have the service completed.
When selling or buying a building conducting it is a “best practice” to conduct a due diligence audit, elevator audit, or vertical transportation audit to verify that the equipment is in its best shape from a safety, reliability and performance position before your purchase, sell or refinance.
Using a Property Assessment Company is NOT enough
It is also amazing to watch a purchaser use a property assessment company to do the audit or assessment of the vertical transportation equipment consisting of hydraulic elevators, traction elevators, escalators, lifts, dumbwaiters, etc. These companies are not qualified to conduct this type of study and typically will rely on the elevator service provider of the building or the fact that the elevator or escalator passed inspection. The service provider is grading their own report card at this time. The fact that it passed inspection does not tell you about the reliability, usage, life cycle, deferred maintenance and many other attributes that need to be addressed when acquiring elevator equipment.
Selling a Building or Set of Buildings
When selling, an elevator audit can uncover elevator deficiencies that need to be addressed by the elevator service providers. These punch list deficiencies are usually cured in a timely manner to meet the time-frames of the property. A primary function of “elevator due diligence” is to analyze and make recommendations as to necessary repairs or upgrades.
Buying a Building or Set of Buildings
When buying a building, bringing in an elevator consultant and not relying on the building data or building personnel has proven to save clients millions. An elevator consultant is an independent industry expert who can determine the condition of the equipment, code requirements needed, and deferred maintenance. The Elevator Consultants reviews all elevator data for a building to make certain the buyer knows all the needs of the elevator to negotiate better price of a property or receive escrow for future elevator needs.
More on Elevator Due Diligence
Proper due diligence is essential when analyzing a potential acquisition or sale. Past records associated with a building’s vertical transportation system can uncover clues to future maintenance and repair. It could also be the “canary in the coal mine” alerting you that the time for an expensive elevator upgrade is on the horizon. Unless an independent elevator consulting firm is involved in the due diligence process, interested buyers could be unaware of the full financial picture.
The Elevator Consultants’ experts conduct thorough elevator inspections on site as well as on paper. Our elevator due diligence process moves beyond evaluating AIC inspection records and safety reports. A clean ASME 17.1 health and safety record may not reflect general wear and tear. Our elevator consultants know the importance of inspecting a hoist way enclosure and traction lifts up close. Our team will find underlying elevator problems current building owners either aren’t aware of, or have chosen to ignore.
Buying or Selling? Our Elevator Consultants Ensure the Due Diligence Process is on Your Side
When an investor considers adding a property to an REIT portfolio, they know where items on the balance sheet should be. Elevator maintenance may be an expense, but it shouldn’t be an unknown liability affecting the bottom line. This is where the value of a second opinion for an elevator audit comes in. Our elevator consultants can keep balance sheets out of the red by helping investors understand what they are signing up for. When an investor is aware of all the facts, a better deal can also be negotiated with the seller.
On the other hand, if it’s time to sell a property, our due diligence will make sure you are clear about the condition of a building’s vertical transportation system. Instead of being surprised by the results from buyers’ own elevator audit, the seller is empowered with accurate information and ready to make a deal. Our elevator due diligence and audits can help sellers price the property accordingly and get it moved off of the REIT portfolio promptly.