A confidential client was considering the building located at 370 Lexington Avenue in New York, NY for an acquisition. However, the building was 77 years old, with 26 stories and a floor area of 290,000 square feet. Before an acquisition process could confidently commence, the client needed to know the overall state of the building and potential repairs or liabilities it would assume.
GZA provided a Level I Property Condition Assessment for the building which included an evaluation of building maintenance records, a review of existing code violations on file with the city, a field walkthrough, and a subsequent report that identified deferred maintenance issues with an estimated total to correct of nearly $375,000. Identified issues included:
- Insufficient fireproofing measures, structural beams and column framing
- Active roof leaks
- Abandoned equipment
- HVAC deficiencies
- Electrical deficiencies
- Elevator modernization needs
During the site visit, GZA discovered maintenance issues and patchwork repairs over the years had reduced the useful lives of many of the building materials and systems. Long-term capital needs were forecasted for repair and maintenance items relating to the building exterior, roof, interior, mechanical, plumbing and fire protection systems. Estimated long-term capital needs were estimated at over $1.9 million.
Our work uncovered liabilities at the Site that had not been previously anticipated. Detailed documentation of the conditions balanced with careful evaluation of risk assisted our client in obtaining the desired sales price of the facility, resulting in a reduction of risk associated with the site.