Capital Needs Assessment Example


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This is an example of the narrative section of a Capital Needs Assessment completed by Crandall Engineering. To learn more, visit

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Capital Needs Assessment Example

  1. 1. Capital Needs AssessmentProject: Apartment Name Date: 5/??/11CAPITAL NEEDS SUMMARYThis assessment was conducted by individuals trained and experienced in building construction. The report that follows is based on thatinvestigation and was prepared as provided by USDA Rural Development PNA Guidelines found in Attachment B and Attachment C to thecontract. The report needs to be read in its entirety to understand fully all of the information that we have obtained.The inspection was performed for the Capital Needs Assessment (CNA) of Apartment Name, ADDRESS, on Month XX, 2011 on behalf ofCORPORATION THAT OWNS APT COMPLEX, Inc. by INSPECTOR. The report was prepared by Crandall Engineering. All pictures andreferences are based on the Month XX, 2011 site inspection. Weather conditions on the day of the investigation were cold with partly cloudyskies.Apartment Name is a senior housing project. Phase I (# units) was originally constructed circa 1900, and Phase II (# units) was constructed 1900.Neighboring properties are comprised primarily of residential multi-family properties and some commercial. The property, with # units housed in# separate one-story buildings, includes all 1-bedroom, 1-bathroom units. In a separate one story building is a community center, laundry,maintenance, community kitchen and a male and Female ADA bathroom. There are currently no fully UFAS compliant accessible apartments.All units have a single exterior door per unit that leads directly to the common parking lot. We recommend s number (#) one-bedroom apartmentsbe upgraded to UFAS standards to meet the 5% capacity requirement for ADA accessibility. All buildings have an exterior access.The purpose of this Capital Needs Assessment (CNA) is to determine the current condition of the building envelope, systems, paved areas, utilities,and site improvements, and to establish a preliminary capital reserve for the future. It is intended to be used in support of real estate transactionswhere the client is either acquiring the building or wishes to know the current condition and future capital requirements for purposes ofrehabilitation and reserve requirements.We performed the CNA according to the scope as generally defined by USDA Rural Development. The survey is based on interviews with localmanagement, a review of available documents, and an examination of the buildings and site, in particular, the foundation and/or slab-on-grade, theroof, the exterior walls, the steel and wood framing, mechanical systems, exterior doors and windows, paved areas, and utilities. During ourinvestigation we inspected (??) apartment units, all common areas and all the building exteriors and grounds at Apartment Name.The report contains the following: A description of the overall condition of buildings’ components and systems and conditions that may limit the expected useful life of the buildings and their components.Narrative Page #1 of 10 CNA Worksheet Version 1.5d
  2. 2. Capital Needs AssessmentProject: Apartment Name Date: 5/??/11 Information about significant deficiencies, deferred maintenance items, and material code violations based on a visual survey of the buildings and grounds, research of documents, and conversations with people who have knowledge about the facility.LIMITATIONSThe statements in the report are opinions about the present condition of the subject property. They are based on visual evidence available during adiligent investigation of all reasonably accessible areas. We did not remove any surface materials, perform any destructive testing, or move anyfurnishings. The study is not an exhaustive technical evaluation. Such an evaluation would entail a significantly larger scope than this effort.The information, observations, and conclusions described in this report are valid on the date of the investigation and have been made under theterms, conditions, limitations, and constraints noted in the report. We prepared the report for the exclusive use of CORPORATION THAT OWNSAPT COMPLEX. No other individual or party shall be entitled to reply upon the report without our express written consent. If another individualor party relies on the report, such individual or party shall indemnify and hold Crandall Engineering harmless for any damages, losses, or expensesincurred as a result of such use. Any use or reliance of the report by an individual or party other than CORPORATION THAT OWNS APTCOMPLEX shall constitute acceptance of these terms and conditions. Any electronic copies of this report that are provided to CORPORATIONTHAT OWNS APT COMPLEX are for the convenience of CORPORATION THAT OWNS APT COMPLEX are not to be construed as theoriginal or final report.The report is limited to the visual observations made during our investigation. We did not remove surface materials, conduct any destructive orinvasive testing, move furnishings or equipment, or undertake any digging or excavation. Accordingly, we cannot comment on the condition ofsystems that we could not see, such as buried structures and utilities, nor are we responsible for conditions that could not be seen or were notwithin the scope of our services at the time of investigation. We did not undertake to completely assess the stability of the buildings or theunderlying foundation soil since this effort would require excavation and destructive testing. Likewise, this is not a seismic assessment.We did not investigate the following areas: All unit interiorsWe do not render an opinion on uninvestigated portions of the facility.Narrative Page #2 of 10 CNA Worksheet Version 1.5d
  3. 3. Capital Needs AssessmentProject: Apartment Name Date: 5/??/11We did not perform any computations or other engineering analysis as part of this evaluation, nor did we conduct a comprehensive codecompliance investigation. The report is not to be considered a warranty of condition, and no warranty is implied. The photographs are an integralpart of this report and must be included in any review.If opinions of probable costs are presented, they are preliminary only. Opinions are based on our general knowledge of building systems and thecontracting/construction industry. When appropriate, we have relied on standard sources, such as Means Building Construction Cost Data, todevelop opinions of probable costs. However, for some items for which we have developed opinions of probable cost (e.g., structural repairs), nostandard guide for developing such costs exists.We have performed no design work as part of the study, nor have we obtained competitive quotations or estimates from contractors as this also isbeyond the scope of the project. The actual cost to remedy deficiencies and deferred maintenance items that we have identified may varysignificantly from estimates and competitive quotations from contractors.EXISTING BUILDING SYSTEMS AND CONDITIONS SUMMARYHEALTH AND SAFETYIn this section of the report, we are concerned with those deficiencies that will require immediate repair or replacement. Any existing health andsafety issues will be addressed by the Owner. Information on any existing health and safety issues are on the repair list provided by the Owner.There are no health and safety issues requiring immediate attention at this site.DEVELOPMENT/PROJECT DESIGN CHARATERISTICS Rehabilitation shall provide: o Provide an equipped computer center and internet access in the community center o Construct a playground on site (shuffleboard) o Individual porch/patio for each unit o Exercise room with exercise equipment (open to all residents)Narrative Page #3 of 10 CNA Worksheet Version 1.5d
  4. 4. Capital Needs AssessmentProject: Apartment Name Date: 5/??/11GREEN DEVELOPMENT/REHABILITATION INITITIVE Water Conservation o Replace all fixtures with those meeting the EPA WaterSense specification Efficient Energy Use o Install daylight sensors (photocells) or timers on all Energy Star rated lighting o Install Energy Star labeled lighting fixtures in all interior units Additional Green Points o Use of at least one construction material made from 50% or greater recycled content; flooring materials and/ or attic insulation will be used. o Project is within ½ mile of amenities relevant to housing projects o 100% brick exterior and replace siding with cement board.SITESite LightingExterior pole mounted lights provide light for site and parking. These also provide ground lighting, light fixtures are also located at each apartmententrance. It is not known if lighting is adequate as the survey was performed during daytime hours; based on the number of lighting fixtures andtenant interviews, the lighting appears to be adequate at the subject property. Building-mounted exterior lighting and the 48 pole lights are original.We recommend replacement with Energy Star lighting fixtures and replace the 48 pole lights with 12 new pole lights.Driveways, Parking Lots and SidewalksA single asphalt parking area is located at the front of the property, with head-in parking spaces with an entrance on the east side of the propertyonto Main Street. A second parking area is located on the north west corner of the property, with head-in parking spaces with an entrance on thenorth east side of the property onto Main Street. There is no ADA parking, signage, curbs, or ramps by the office or apartment buildings. Thesidewalks are in fair condition with some needing replaced/repairs. However, new walks and ramps should be installed to provide accessibilitythroughout the site.Narrative Page #4 of 10 CNA Worksheet Version 1.5d
  5. 5. Capital Needs AssessmentProject: Apartment Name Date: 5/??/11Site DrainageSite drainage for storm runoff is adequate in most areas. Some areas have been reported to have inadequate drainage causing large amounts ofstanding water. All inlets to the city’s storm system are adequate.LandscapingLandscaping consists of trees, shrubs, and lawns surrounding the buildings. The quality and health of the vegetation and landscaping at alllocations is in fair condition. We recommend select landscaping improvements to improve the appearance and marketability of the apartments.SignageThe site features one property identification sign posted near the property entry. The sign identifies the property by name.Dumpster EnclosuresThere are two dumpster areas to deposit trash on the site. New enclosures are recommended to improve the appearance, marketability, and sanitaryof the apartments.ARCHITECTURALStructural ElementsThe property, with 48 units housed in (12) separate one-story buildings, includes all 1-bedroom, 1-bathroom units. A separate building houses acommunity center, laundry room, maintenance work/storage area, a male and female bathroom, and community kitchen. There are currently noUFAS compliant accessible units. We recommend three (3) units be upgraded to UFAS standards to meet the 5% capacity recommendation forADA accessibility. The buildings exteriors are covered in with a brick veneer. Roofs are moderately sloped with asphalt/fiberglass compositeshingle surfacing. All roofs on all buildings were replaced n 2009. The substructure system is a poured concrete slab. Wood stud perimeterbearing walls are used at the exterior to carry the pre-manufactured roof trusses and other roofing components. The buildings and grounds are infair to good condition.Walls, Windows and DoorsWalls should be patched and painted as part of regular maintenance between tenants. We recommend that all interior doors should be replaced.Sixteen (16) units of phase I and II exterior windows are original wood windows with aluminum storm windows and exterior unit doors areoriginal we recommend replacement with Energy Star windows and doors. Sixteen (16) units of phase I and II exterior windows are original woodNarrative Page #5 of 10 CNA Worksheet Version 1.5d
  6. 6. Capital Needs AssessmentProject: Apartment Name Date: 5/??/11windows with aluminum storm windows, all other windows are four (4) years old. The original windows are in poor condition. Exterior doors areoriginal hollow steel at the resident entries.Common AreasThere is a separate building with a community center, kitchen, laundry room, male and female bathroom and maintenance area, we recommendreplacing appliances with Energy Star rated products and all fixtures with EPA specific fixtures. The existing office, is located in unit D109, usingthe bedroom for maintenance storage. We recommend the addition of a maintenance work shed and remodeling the community center toincorporate the office.Fire Suppression and Life SafetyThe buildings have smoke detectors in all units. We recommend that all smoke detectors be hard wired. There is also an emergency pull cordsystem located in all units. Doors from the interior of the apartments lead directly to the exterior. Stove top fire stops in range hoods are alsorecommended to be installed.MECHANICAL AND ELECTRICHVAC SystemsThe (32) Phase I units have electric base board heat and window mount A/C in the living room. The sixteen (16) Phase II units have gas furnacesand exterior central A/C units. We recommend replacing all units with Energy Star heat pumps and air handling units with electric assisted heat.This would reduce the energy cost to the tenant and improve the comfort.Plumbing SystemsThe local utility company provides water and sewer services. Copper piping is used to distribute interior domestic water, while plastic piping isused for the wastewater collection. Bath fixtures are original and we recommend replacement. EPA WaterSense lavatories, water closets, andshowerheads should be installed when replaced. Many water heaters are past their EUL. We recommend replacement of all water heaters.Electrical SystemsElectrical services come to each building, standard house voltage service at each apartment with a distribution panel serving an individual, panel ateach apartment. Each apartment has its own breaker panel. The electrical service to each dwelling unit consists of 120/240V ac 3-wire single-phase with breaker panels rated for 125 amps. The apartments are on individual electric meters. There are no reported problems associated withthe wiring at this property.Narrative Page #6 of 10 CNA Worksheet Version 1.5d
  7. 7. Capital Needs AssessmentProject: Apartment Name Date: 5/??/11Lighting SystemsInterior light fixtures and bath exhaust fans are original. We recommend new Energy Star lighting fixtures and exhaust fans be installed. Werecommend installation of ceiling fans and light fixture combos be installed in all living rooms.DWELLINGSInterior ElementsThe apartment interiors consist of one bedroom, a kitchen, a living area, a utility closet, room closet and coat closet. In the kitchen, there are woodcabinets with laminate countertops, an electric range with a range hood, refrigerator, and sink with a standard single lever. We recommendbeginning replacement of the carpet and resilient flooring. Carpet should be replaced on a 10-year cycle. Resilient flooring should be replaced ona 20-year cycle. This includes replacing the carpeting with resilient flooring in the office area and community area. Kitchen cabinets andcountertops/sinks are original and we recommend their replacement. Many of the cabinets have warped and expanded due to water intrusion atkitchen sinks. EPA WaterSense faucets should be installed. Most ranges and range hoods are original we recommend their replacement. Fewrefrigerators have been replaced and we recommend replacing them with Energy Star units. Vanities and bathroom fixtures are mostly originaland should be replaced. Many vanities have experienced the same problem with water damage at the bath sink.ACCESSIBILITYDuring the CNA inspection, the site and all public areas were screened for compliance with the Architectural Barriers Act, Section 504 of theRehabilitation Act of 1973, and the Americans with Disabilities Act. The Fair Housing Amendments Act effective date is 3/13/1991, and thisproperty pre-dates FHA accessibility requirements.Multifamily housing dwelling units and common areas such as vehicle parking lots, mailboxes, trash dumpsters, and playgrounds are subject tocompliance with UFAS. Under UFAS, 5 percent of the total units, or one unit, whichever is greater must be fully accessible. The mix ofaccessible units is to be comparable to the total mix of units at a specific property. The locations of accessible units are to be dispersed throughoutthe project. ADA Guidelines require that at least one total but not less than one van-accessible parking space shall be made available for everyeight accessible spaces. Van accessible and handicap parking space signs are also required, with a sign post and aisle directly connected to theaccessible route.Narrative Page #7 of 10 CNA Worksheet Version 1.5d
  8. 8. Capital Needs AssessmentProject: Apartment Name Date: 5/??/11Accessible UnitsCurrently there are no fully UFAS compliant accessible apartments. There are 2, one-bedroom apartments which have been modified to meetaccessibility needs of tenants. We recommend three (3) units be upgraded to UFAS standards to meet the 5% capacity recommendation for ADAaccessibility. There are designated accessible parking spaces, however the pavement and signage do not meet the ADA specific requirements andneed to be modified and updated. Ramps are not provided up to every sidewalk, and modifications should be made to incorporate this. New walksand ramps should be installed to provide accessibility throughout the site.Accessible ParkingThere are designated accessible parking spaces, however the pavement and signage do not meet the ADA specific requirements and need to bemodified and updated.Public RestroomThe Community Center complete with a male and female ADA restrooms are not UFAS compliant. The office, unit D109, is not UFASassessable. We recommend upgrading all common areas to be fully UFAS compliant.ENVIRONMENTALLead Based PaintPhase I buildings where constructed in 1976, Phase II buildings where constructed in 1984. The ban on lead paint occurred in 1978, after Phase Iand prior to Phase II. It is unknown if lead based paint was used. To the best of our knowledge no tests have been performed.Asbestos Containing MaterialPhase I buildings where constructed in 1976, Phase II buildings where constructed in 1984. The ban on asbestos containing construction materialsoccurred in 1978, after Phase I and prior to Phase II. To the best of our knowledge no tests have been performed.Mold and MildewThe subject property was visually inspected for the presence of moisture intrusion and mold growth. There was not any evidence of moistureintrusion or mold growth during our site visit.Flood ZoneThe subject property is located in an area that is mapped in published FIRM as zone “X”.Narrative Page #8 of 10 CNA Worksheet Version 1.5d
  9. 9. Capital Needs AssessmentProject: Apartment Name Date: 5/??/11Transmission LinesNo electrical power transmission lines are located in the immediate vicinity of the subject property.Pest ControlPest infestations were not observed or reported during the inspection.Other Environmental ConcernsNo other environmental concerns were identified at the subject property.HOW REPLACEMENT COSTS ARE DETERMINEDWe developed a scope of work with the Owner. Our scope of work considered published cost data from reliable sources. When possible, weutilized actual contractor pricing in the area in developing our cost estimates. We used the Fanny Mae Expected Useful Life Tables as a guide inour replacement reserve analysis. These tables are provided by USDA in their January 07, 2011, Un-numbered Letter regarding Capital NeedsAssessments.NEEDS FUNDED BY THIRD PARTYThis project is applying for third party funding for rehabilitation through the Federal Home Loan Bank of Indianapolis and the Affordable HousingProgram 2011 Implementation Plan and also the IHCDA for Strategic Investment Program. A copy of the Repair List used for this report isavailable from the Owner.ACKNOWLEDGEMENTSThe following people were interviewed during our survey: Mrs. No Namer (Site Manager)Narrative Page #9 of 10 CNA Worksheet Version 1.5d
  10. 10. Capital Needs AssessmentProject: Apartment Name Date: 5/??/11We reviewed the following documents: Apartment Name Construction Documents 19??Maintenance DescriptionMaintenance is handled in-house or by contract teams as needed.Observations & CommentsMaintenance practices for the subject appear to be adequate as in evidenced by the physical appearance of the property and its general condition.Keep in mind that as properties age, their maintenance requirements will likely escalate.Narrative Page #10 of 10 CNA Worksheet Version 1.5d