Today we received a wonderful question from Tad in New Orleans who asked “Our investor group found a really nice retail property in a location that we think is going to become more and more valuable, but as part of our due diligence, our engineer warned that the EPDM roof [whatever that is] was nearing the end of its useful life. The seller tells us that we can put another roof on top of the existing one very inexpensively. Is that really true?”
As with most questions like this, there is no hard and fast rule. EPDM [properly known as ethylene propylene diene terpolymer] is arguably the most common type of roofing used for relatively flat surfaces and, properly applied, such roofs will be warranted for between 15 and 20 years. Available in black and white, EPDM roofs are made from oil and natural gas, and are applied in a variety of widths that overlap and are sealed with adhesives or specially formulated tapes. Properly installed and maintained, these roofs should provide excellent protection for your valuable asset.
However, there are many factors that determine the success that you will enjoy with your rubber roof. A poorly adhered seam or a puncture wound [oftentimes inflicted by careless maintenance persons who service rooftop systems such as HVAC, antennae plumbing vents, grease scrubbers, etc.] will leak and may often be hard to find and correct. Similarly if the roof was not professionally engineered, contractors will tend to find “shortcuts” that lower their bid or increase their profit with shortcuts that will likely be unseen by anyone other than roofing professionals. Keep in mind that standing water is the bane of most roofs, and a proper design will have slope of at least 4% … again somewhat dependent on the climate conditions in your target community.
There are innumerable variables that will determine the type of roof you require and to determine if, in fact, you can simply apply a second roof on top of an existing one [many communities do not allow this practice … particularly where the roof load has not been fully analyzed and deemed satisfactory to the new additional weight]. How the roof is fastened, to what weather standards it has been designed [for instance a roof placed on a building in South Florida will likely have to be able to withstand higher wind lift standards than in other areas of the country], the manner in which slope is provided [and to what standard], and the rating of the proposed insulation all are major factors in estimating cost and one should not assume that the company with the lowest price is the best value.
At Fielding Investments, we utilize professional roofing engineers to set the specifications for roofs that we require. The fee is often quite substantial, but we find that only the most professional firms will quote our jobs and we enjoy the benefit of knowing that all quotes that we receive are “apples for apples”.
With all but NNN leases, the requirement that the roof be leak-proof is borne by the Landlord … so we recommend that you have a roofing engineer inspect and advise whether the Seller’s suggestion that you can install a roof over the existing leaking one meets your local building code. Keep in mind that if the roof has leaked, there is a strong possibility that there will be damage to the underlayment, including insulation, wood joists, and plywood decks, to say nothing about one of the most troublesome environmental concerns of mold formation.
Good luck with your investment activities … let us know if your deal is successfully culminated.
Brian FieldingRead More