new to commercial - implications of buying building with 34% earthquake standards?

[jack2016]

Hi I am wondering if it is wise to buy a building that is only 34% of the earthquake standard? The agent says there is no need to improve it.

Thanks

[donna]

Where is it Jack2016?

Not sure I’d be listening to an Agent selling the property.

How long has it been on the market?

cheers

Donna

[JBM]

I agree with Donna don't trust RE.agents .. but I'd only be looking at 34% NBS(earthquake risk) if it was located in very low earthquake risk area and the building was in very good condition for its age and had great tenant + long term lease at high return

[hawkeye]

No, no, no, no. You would be crazy.

[erinak]

Of course the Agent would say that. They're invested in SELLING the property. Caveat Emptor: Let the Buyer Beware.

[donna]

I've found a blog on it that's worth a read.

34% and risk to life is 10 times more likely than a new build of a similar building. 34% is considered high risk.

cheers,

Donna

[erinak]

Um, OK. I was assuming Jack2016 had already done their own search on any blogs etc before asking here. If not, then put your feelers out for any available testible site for further info.
Personally, I would move on.

[Scouser]

It affects ability to finance if below the minimum - but the devil is in the detail. Auckland and Waikato are seismically stable and 33% has been OK for me. Would run a mile from similar in Wellington. In terms of risk 34% is effectively no real risk in Auckland because of relatively tiny earthquake risk but it's not about real risks if banks get involved. The fact mentioned here about 34% being 10 times the risk can be somewhat misleading as ten times a very small number is still a very small number. But again it's about perception rather than reality.

There have been similar posts before I would read as well.

[darrenc]

It depends on the circumstances. I have a 38% NBS in Napier, but it's a wooden building which survived the 1931 earthquake no problems. I wouldn't buy a brick/concrete building with a 34% NBS somewhere that's earthquake-prone. The banks often don't like it when it's less than 67%. If you're getting a good return, or you're landbanking for a future project, that changes the equation.

[jack2016]

thanks i did not move on that property