29 Jul Last Week, California Gets Shaken – Could Your Real Estate Investment Also?
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Southern California Gets Shaken Last Week – Could Your Real Estate Investment Also?
Last week on the morning of our nation’s birthday, most Southern Californians felt, and all heard, the news that a 6.4 magnitude earthquake occurred. The day after a 7.1 magnitude earthquake occurred along the same fault that was approximately 10 times stronger. Luckily, no fatalities or major injuries were reported as a direct result. However, power and communication systems were knocked out within parts of San Bernardino County, and some homes and buildings sustained significant damage.
We at FR as a first want to stress the importance of having an emergency plan with your families, friends, and neighbors should a disaster hit. With little to no warning of earthquakes, the harsh reality of loss could occur in a matter of seconds if not prepared.
As a follow-up, we also need and want to express the importance of due-diligence as it pertains to structural integrity of a building. Many lenders are now starting to put greater emphasis on Seismic Risk Assessments and Probable Maximum Loss Reports for buildings that fall under certain criteria (as shown below). A Seismic Risk Assessment is a great tool to determine the maximum loss a building could sustain should a disaster occur given its specific construction characteristics. It is a real thing and harsh reminder we endured last week Thursday and Friday that can strike out of nowhere given that it has been nearly two decades since a significant earthquake has hit Southern California.
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To receive a quote, schedule and assessment, or discuss your situation in more detail:
Greg L. Gavasse, MSSE, P.E.
Fulcrum Resources Environmental
Damage to homes, but no deaths reported, in 7.1 magnitude California earthquake
California’s second major earthquake in less than two days struck near…
Seismic Risk to Buildings
Before &After Photo – Loma Prieta Earthquake 1989, San Francisco.
FRE provides seismic risk assessments (PML’s / SEL’s / SUL’s) for pre-acquisition due diligence services and refinancing services. In evaluating a building’s potential for seismic damage and stability against collapse, we consider six basic characteristics: Configuration, Condition, Compatibility, Continuity, Redundancy, and the Lateral Load Resisting System. In addition, building stability and site stability are evaluated. Below is a list of buildings that are susceptible to significant damage when subjected to large ground motions / earthquakes:
- Concrete Tilt-Up Buildings: Pre-1976
- Tuck Under Parking Buildings; Multifamily; Wood Frame: Pre-1988
- Wood Frame Buildings with Crawl Spaces: Pre-1976
- Buildings with a Soft Story: Pre-1988
- Irregularity in Shape / Stiffness: Pre-1988
- Steel Moment Frame Buildings: Pre-1994
- Concrete Frame Buildings: Pre-1976
- Concrete Shear Wall Buildings: Pre-1980
- Precast Concrete Frame Buildings: Pre-1994
- All Un-reinforced Masonry Buildings
- All Hollow Clay Tile Buildings
- Masonry Buildings: Pre-1980
- Also, All Buildings Located on a Site with a Potential for Liquefaction, Landslides or in an Alquist-Priolo Special Studies Zone.
Note equity owners, insurers and lenders are evaluating buildings with more and more intense scrutiny for the potential of seismic risk / damage. This is largely based on prior losses from significant historical earthquakes. For example, the 1989 Loma Prieta earthquake caused more than $6 billion in damage and the 1994 Northridge earthquake caused over $20 billion in damage. Financial institutions need specific and consistent measures of future damage loss for this decision process.