Torrance, CA—Property buyers and lenders nationally ordered 10.7 percent more Phase I Environmental Site Assessments (ESA) in the first quarter of 2012 compared to the like period of 2011, according to Environmental Data Resources, Inc., a recognized market monitor and information services firm. In all, there were 49,355 reports ordered in the first quarter this year, as compared to 44,599 in the first quarter of 2011.
Based on Phase I ESAs, the nation should see stronger volumes in real estate transactions in the coming months, according to Joseph P. Derhake, PE, President of Partner Engineering and Science, Inc., an engineering consulting firm ranked the No.1 environmental due diligence firm in the nation, based on number of reports completed.
“Generally, lenders and buyers hire firms such as Partner to do a Phase I ESA to clear the path to a loan financing a property sale,” said Derhake. “When we send more personnel out into the field to assess and test property, it means bankers and escrow officers are getting busier.”
For Partner, work is up. Nationally, the firm performed 2,147 Phase 1 ESAs in the first quarter—an all-time record for the firm — up 15.8 percent from a year earlier. “Demand is up, and we are making efforts to capture market share,” said Derhake. “Sellers are meeting terms necessary for sale, and lenders are easing up a bit on financing. Interestingly, Partner has seen increased demand from the commercial mortgage-backed securities segment.
The 10 major metropolitan areas experiencing the strongest growth are spread out across the nation, indicating a generally improving national market. The major urban areas experiencing the strongest growth include Salt Lake City, up 53 percent; Memphis (48 percent); Jacksonville, FL (38 percent); Boston (33 percent); and Kansas City, MO (32 percent).
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