In-House Property Damage Restoration: A Growing Trend in Commercial Real Estate

The commercial real estate (CRE) industry is witnessing a notable shift as property managers and owners increasingly embrace in-house property damage restoration. This trend involves training and equipping internal staff to handle restoration tasks that were traditionally outsourced to specialized companies. This approach is particularly relevant for general nonresidential properties, including office buildings, warehouses, manufacturing facilities, and retail spaces¹. This report delves into the factors driving this trend, examines the benefits and drawbacks, identifies leading CRE companies adopting this approach, and explores the necessary training and equipment for successful in-house property damage restoration.

Drivers of the In-House Restoration Trend

Several factors contribute to the growing popularity of in-house property damage restoration in the CRE sector:

• Cost Savings: Outsourcing restoration work can be expensive, especially for routine or minor damages. By handling these tasks internally, CRE companies can significantly reduce costs associated with contractor fees, emergency service charges, and potential project delays. For instance, the average cost of fire damage restoration can range from $8,600 for minor incidents (Class A fires) to $24,800 for more severe cases (Class D fires)².
• Faster Response Times: In-house teams can respond to property damage incidents more quickly than external contractors, minimizing downtime and preventing further damage. This is particularly crucial for time-sensitive situations like water leaks or fire damage⁴.
• Increased Control and Efficiency: Managing restoration in-house provides CRE companies with greater control over the process, ensuring quality standards are met and timelines are adhered to. This can lead to increased efficiency and improved tenant satisfaction. Implementing ongoing quality checks and maintaining clear communication throughout the restoration process are key to maximizing control and efficiency⁵.
• Enhanced Tenant Satisfaction: Faster response times and efficient restoration contribute to tenant satisfaction by minimizing disruptions and demonstrating proactive property management⁶.
• Improved Expertise and Knowledge: In-house teams develop specialized knowledge of the property's infrastructure and potential vulnerabilities, enabling them to implement preventative measures and handle future incidents more effectively⁵.

Furthermore, the increasing frequency of natural disasters and the aging of existing building stock contribute to the growing demand for restoration services, making in-house capabilities even more appealing⁷.

Technology's Role in In-House Restoration

Technology plays a crucial role in modern property damage restoration, and in-house teams can leverage these advancements to enhance their effectiveness:

• Artificial Intelligence (AI): AI and machine learning can analyze data from past incidents to predict potential problems, optimize resource allocation, and streamline decision-making during restoration projects⁸.
• Building Information Modeling (BIM): BIM technology creates detailed 3D models of properties, enabling accurate damage assessment and efficient planning of restoration work⁸.
• Internet of Things (IoT): Sensors and monitoring devices can detect issues like water leaks or temperature fluctuations in real-time, allowing for proactive intervention and preventing extensive damage⁸.
• Improved Disaster Response: Drones and advanced communication technologies facilitate rapid damage assessment and efficient resource allocation in emergency situations, enhancing preparedness and response times⁸.

The In-House Restoration Process

A typical in-house property damage restoration process involves the following steps:

• Assess the Damage: Conduct a thorough inspection to determine the extent of the damage and identify the cause⁹.
• Secure the Property: Take immediate action to prevent further damage, such as boarding up broken windows or tarping damaged roofs⁹.
• Remove Water/Debris: Extract standing water, remove debris, and clean up hazardous materials⁹.
• Dry the Affected Area: Utilize dehumidifiers and air movers to thoroughly dry the affected areas and prevent secondary damage like mold growth⁹.
• Clean and Disinfect: Clean and disinfect all surfaces to ensure a safe and healthy environment⁹.
• Repair and Restore: Conduct necessary repairs, including structural work, drywall replacement, painting, and other finishing touches⁹.

Benefits and Drawbacks of In-House Restoration

While in-house property damage restoration offers several advantages, it's essential to consider potential drawbacks:

In-house restoration allows CRE companies to foster a performance culture by giving their teams a direct stake in the property's well-being. This sense of ownership can lead to increased efficiency and higher quality work¹¹. However, it's crucial to weigh these benefits against potential challenges, such as the initial investment in training and equipment, the risk of limited expertise in specialized areas, and the difficulty of handling large-scale disasters.

Training and Equipment for In-House Restoration

Effective in-house property damage restoration requires proper training and specialized equipment:

Training:

• Certifications: Industry-recognized certifications, such as those offered by the Institute of Inspection, Cleaning and Restoration Certification (IICRC) ¹⁶ and the Restoration Industry Association (RIA) ¹⁷, are crucial for ensuring staff possess the necessary knowledge and skills. Key certifications include:

• Water Damage Restoration Technician (WRT): This certification covers the principles of water damage restoration, including extraction, drying, and dehumidification techniques.
• Applied Structural Drying Technician (ASD): This certification focuses on advanced drying techniques for various building materials and structures.
• Fire and Smoke Damage Restoration Technician (FSRT): This certification equips technicians with the knowledge and skills to handle fire and smoke damage, including soot removal, odor control, and structural repairs.
• Applied Microbial Remediation Technician (AMRT): This certification deals with mold remediation, including assessment, containment, and removal techniques.

• Safety Training: Comprehensive safety training is essential to protect staff from hazards associated with property damage restoration, including exposure to mold, asbestos, and other potentially harmful substances¹⁸.
• Insurance and Legal Considerations: Training should cover relevant regulations, legal liabilities, and insurance requirements to ensure compliance and minimize risks¹².

CRE companies can strategically focus on training their teams in areas most relevant to their properties and potential risks. For example, properties in flood-prone areas might prioritize water damage restoration training¹¹.

Equipment:

• Water Damage Restoration: Water extraction equipment (pumps, vacuums), dehumidifiers, air movers, moisture meters¹⁹.
• Fire Damage Restoration: Air scrubbers, ventilation systems, deodorization equipment, soot removal tools²⁰.
• Mold Remediation: Containment barriers, air filtration devices, antimicrobial cleaning agents²¹.
• Personal Protective Equipment (PPE): Hard hats, goggles, respirators, gloves, protective clothing²².

Regulations and Legal Considerations

In-house property damage restoration teams must comply with relevant regulations and legal considerations:

• Licensing and Permits: Depending on the location and scope of work, specific licenses and permits may be required for restoration activities¹⁸.
• Environmental Regulations: Proper handling and disposal of hazardous materials, such as asbestos and lead-based paint, are crucial to comply with environmental regulations²³.
• Insurance Requirements: Adequate insurance coverage, including general liability, professional liability, and workers' compensation, is essential to protect the company and its employees¹².
• Documentation and Record-Keeping: Maintaining detailed records of restoration activities, including assessments, procedures, and expenses, is crucial for insurance claims and legal compliance²⁴.

Leading CRE Companies and Facility Managers

While specific examples of CRE companies with fully established in-house property damage restoration teams are limited in industry data, the trend is evident in the growing demand for such services. Companies like SERVPRO ²⁵ and Jenkins Restorations ²⁶ offer comprehensive commercial restoration services, exemplifying this demand and potentially encouraging more CRE companies to develop in-house capabilities.

Furthermore, building strong local relationships with suppliers, contractors, and other professionals can enhance the effectiveness of in-house teams by providing access to specialized expertise and resources when needed¹¹. As the trend gains momentum, more CRE companies and facility managers are likely to invest in developing in-house capabilities, potentially leading to case studies like the Racquetball Court Rebuild, where a company successfully restored a water-damaged property using its internal team²⁷.

Conclusion

The trend of in-house property damage restoration in commercial real estate is driven by cost savings, faster response times, increased control, and enhanced tenant satisfaction. While challenges exist, CRE companies can successfully implement this approach by investing in comprehensive training, acquiring appropriate equipment, and adhering to relevant regulations. As the industry evolves, in-house restoration is likely to become increasingly prevalent, offering a competitive advantage to CRE companies that embrace this strategy.

This trend has significant implications for the restoration industry as a whole. As more CRE companies bring restoration in-house, traditional restoration companies may need to adapt their business models to focus on specialized services, large-scale disasters, or consulting roles. Furthermore, the growing demand for in-house expertise highlights the need for standardized training programs and certifications specifically tailored to the needs of CRE companies.

For CRE companies considering in-house restoration, a thorough assessment of potential costs and benefits is crucial. Factors to consider include the frequency and types of damage typically encountered, the availability of qualified personnel, and the company's risk tolerance. By carefully evaluating these factors and implementing a well-planned strategy, CRE companies can leverage in-house restoration to improve efficiency, reduce costs, and enhance tenant satisfaction.

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