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| Michael Bull |
ATLANTA (Nov. 27, 2012) – When it’s time to purchase
commercial real estate properties, not performing due diligence on a site’s
potential environmental issues can be a costly mistake for a buyer.
That was one of the many important points outlined by a panel
of environmental-liability experts in the most recent episode of Michael
Bull’s “Commercial Real Estate Show.”
The episode provided an enlightening look at the many
environmental issues confronting buyers and sellers of commercial real estate,
including Phase 1 Environmental Site Assessments, risk mitigation and vapor
intrusion.
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| Robert Brawner |
When considering purchasing a property, a potential buyer
should always perform due diligence on potential environmental issues and give
itself plenty of time to do so, the experts agreed. Otherwise, a property owner
could eventually find itself saddled with exorbitant cleanup costs.
“There are horror stories out there,” said Robert Brawner,
an environmental engineer and owner of One Consulting Group. “There’s a small
Georgia town where a large industrial manufacturer bought a plant, didn’t do
enough due diligence to find a problem and wound up with a $30 million
environmental remediation issue.”
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| Ken Burrell |
Lenders often require buyers to conduct a Phase 1 test to
pinpoint any environmental-liability issues associated with a real estate
asset; conducting the test also can provide Superfund liability protection.
A typical Phase 1 test takes about three weeks to complete
and would cost the owner of a 2,000-square-foot commercial building about
$1,500, Brawner said.
The discovery of an environmental issue doesn’t mean a buyer
should automatically walk away from a sale, said John Spinrad, an
environmental attorney with Arnall Golden Gregory. “There are very few problems
that can’t be solved if you allow enough time for due diligence because there
are enough tools that we can use for dealing with risk – whether it’s insurance
or a brownfields program,” Spinrad said.
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| John Spinrad |
An emerging environmental issue is “vapor intrusion,” said Ken
Burrell, a managing partner of Synapse Services, a provider of
environmental insurance. “Vapor intrusion” is the migration of volatile organic
compounds from subsurface groundwater into the interior of a commercial
building, where people can inhale them.
The entire episode on environmental issues and strategies is
available for download at www.CREshow.com.
For More Information, Contact
Stephen Ursery
Wilbert News Strategies
404.965.5026
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