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ENVIRONMENTAL SURVEYS
PROJECT
PROFILES
THE VALUABLE PHASE I SITE ASSESSMENT: ASSIGNING REAL RISK TO TRANSACTION ENVIRONMENTAL ISSUES
With the sustained
growth of the region's economy, it is obvious that the volume
of real estate transactions in the area has increased.
Similarly, the volume of Phase I Environmental Site
Assessments which we are conducting has grown accordingly. As
a key component of our business, RT continues to develop new
strategies which set our Phase I product apart from our
competitors.
What Defines a
Valuable Phase I?
The goal of the
effective Phase I is not to simply identify potential
problems. Many assessments commonly fail to include what the
buyer and seller really need from the report, which are
recommendations and conclusions as to precisely what the
identified issues mean to the transaction. Too often, the
results of a Phase I site assessment merely state the obvious
features of a property which are of potential concern. In many
cases, the property owner or potential buyers is, to a degree,
already aware of such risks.
The challenge of
the effective Phase I report, and the characteristic which
gives it real value to a client is the way that it defines the
liabilities associated with the features which pose potential
concerns. While at first this may seem like a subtle
difference, it is in fact an extremely important extension of
the report which many companies fail to provide. It is
important, then, for an effective Phase I to keep in mind the
goals of the reader. That is, when a potential purchaser or
buyer is reading a Phase I, they are thinking, OK, now what
does this mean to my transaction?
Take for example, a
relatively common observation: suppose that a property has an
out of service underground storage tank on site. It is not
enough for a Phase I Assessment to simply report that a UST is
on-site, and list its age, size and contents. This is, in
fact, of no real assistance and can hold up the transaction.
The valuable Phase I, after noting that the UST is present,
also addresses the following important factors: What is the
nature of the upcoming transaction? What, if any,
documentation can be provided to address the condition of the
UST? Are there any indemnifications or other agreements in the
upcoming transaction which would affect the determination of
this tank as a risk? And finally, what would be the potential
costs (i.e. effect on the transaction) associated with the
investigation and/or tank removal to eliminate the
risk?
As illustrated
above, perhaps the most important part of an effective and
valuable Phase I is that the individual preparing the Phase I
must understand the dynamics of the transaction
itself.
Future Planned Use
In additional to
the nature of the transaction, the future planned use of a
subject property can affect the determination of what
potential risk an issue poses. The future planned use of a
property can help to determine the real risk of such issues as
the presence of potable wells, lead based paint, fluorescent
lighting, waste or debris piles, and many others. Effectively
considering this factor can help to define whether these
issues are of great or little concern. These decisions become
of particular importance when potential environmental concerns
are identified inside a building or structure, such as the
presence of lead-based paint or asbestos-containing material.
In these circumstances, the valuable Phase I will address the
following questions:
- What is the
client's role in the pending transaction?
- What degree of
public or private occupancy or use of the property is
planned?
- Is the structure
to be partially renovated, fully renovated or demolished?
- Is there to be
continuous or part-time residential occupancy of a building,
and will children be on the property?
- What is the cost
of the abatement of the risks found, and how will it affect
the upcoming transaction?
All of these
factors, when properly considered, help to create an
assessment that is of real value to the client. Essentially,
the value is derived from the assignment of real, quantifiable
risk to the issues found on a property. Since these
quantifiable items are often factors into the price of a
property as part of transaction, it becomes a very important
part of the negotiation and closing process.
As RT's assessment
and investigation capabilities continue to be a strong
cornerstone of our business, we will continue to be at the
forefront of real estate based transaction assessments such as
Phase I/Phase II assessments and investigations. In upcoming
issues of the RT Review, other specific issues which commonly
arise in assessment reports, such as lead paint, asbestos, and
USTs will be features. Should you find yourself in need of a
valuable Phase I, one that defines your potential liability
rather than merely identifies the features of a particular
piece of property, please be sure to call us. We'll be happy
to discuss how a property assessment can assist you in
effectively managing the risks associated with your upcoming
real estate transaction.
Environmental Survey for Remortgage
In Bucks County,
Pennsylvania, RT Environmental Services completed an
environmental survey for a service station construction
contractor seeking a remortgage. Pennsylvania banks now
require environmental surveys before real property can be used
as collateral. The work was completed within a week and
included review of aerial photos to help confirm past land
uses. The property owner was seeking a remortgage and all
leading Pennsylvania banks now require environmental surveys
for remortgaging activities.
Other Environmental
Surveys Completed by RT:
- Truck Freight
Terminals - Pennsylvania and New Jersey
- Banking
Facilities - Pennsylvania
- Manufacturing
Facility - Tennessee
- Chemical
Manufacturing Facility - Philadelphia
- Automobile
Dealerships - West Virginia, Pennsylvania, New Jersey, New
York
- Dyeing Facility
- Philadelphia
- Current and
Former Service Stations - New Jersey, Pennsylvania, New York
- Port Area
Industrial Property - Florida
- Electrical Goods
Manufacturing Facilities - Michigan and Pennsylvania
- Trailer Leasing
Facilities - New Jersey and Pennsylvania
- Retail Stores
and Offices - Pennsylvania and New Jersey
- Residences -
Pennsylvania and New Jersey
- Warehouses -
Pennsylvania and New Jersey
As part of
environmental survey work, RT has also completed tank
removals, wetlands delineations, lead paint surveys, asbestos
surveys, site investigations and waste removals.
Our flexible
approach to environmental survey work allows us to respond in
a manner which frequently allows the property transaction to
go forward while environmental issues are
addressed.
* ENVIRONMENTAL
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