March 19, 2014
Capital Needs Assessment Methodology
Commercial Real Estate Due Diligence in the Bay Area
Whether you’re a property manager or a builder, you may need to obtain a Capital Needs Assessment (CNA) to determine the viability of a housing or building project. A CNA helps stakeholders come up with a long-term budget and ensure the viability of projects.
Different companies approach CNAs with different methodologies. In general, the following rules should apply.
First, identify all facilities that you’ll need to analyze as well as all the systems and tool you’ll need to complete the initial CNA and any subsequent analyses. Estimate the costs and time frames associated with these tasks. Next, identify the deficiencies in the housing facility to prioritize how you will repair or remediate problems. Obtain time and cost estimates for fixing the facility, and develop a structured way of reporting recommendations.
Next, forecast the capital that you’ll need for the project (and ID possible cash shortfalls!) and compile inspection forms. A previous owner or developer may have initiated maintenance and/or repair projects. You’ll need to consider those projects in your analysis as well.
Develop a strategic plan to ensure that the project comes in on scope, on budget, and on schedule. Consider your time frame, estimated costs, any environmental regulations that might govern the project, investor considerations, legal work, etc. Be thorough in your due diligence. Prepare your CNA and other critical analyses effectively, and you’ll be more likely to enjoy success and to manage any surprises that crop up during the project with grace.
Contact the Bay Area Environmental Engineers!
The team here at Essel Environmental has a wealth of experience doing Capital Needs Assessments for investors and builders like you. We can help with other critical environmental testing, and remediation work as well. We’d be happy to speak with you and your project managers to develop solutions. Call us today at 1-800-595-7616 to set up a consultation.