Torrance, CA—The Midwest of the United States experienced an 11.1 percent increase in total industry 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., (EDR) a recognized market monitor and information services firm.
Phase I assessments are a unique indicator of real estate transactions, and thus of general real estate market conditions. “Based on Phase I ESAs, the Midwest should see improving numbers of real estate transactions in coming months,” said Joseph P. Derhake, PE, President of Partner Engineering and Science, Inc., a national engineering consulting firm ranked the No.1 environmental due diligence firm in the United States, based on number of reports completed.
Derhake explained, “Generally, lenders and buyers hire a firm such as Partner to do a Phase I ESA because there is a serious intent to arrange financing to complete a transaction. When we get busier, it means bankers, escrow agents, buyers and sellers are almost certainly getting busier too.”
As defined by EDR for the purposes of this study, the Midwest encompasses the 12 states of Indiana, Illinois, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. In all, there were 10,182 Phase I ESAs performed in the first quarter in the Midwest, up from 9,166 in the year-ago period. Nationally, 49,355 ESA’s were conducted in the first quarter, an increase of 10.6 percent from the first quarter of 2011.
Among major metropolitan markets in the Midwest, Kansas City, MO was particularly strong with a 32 percent upsurge in Phase I assessments.
In a growth mode, even during the recent real estate slowdown, Partner experienced a 15.8 percent increase in business in the first quarter of 2012, compared to a year earlier. “We are boosting our market share, but we are seeing revival in property markets,” said Derhake. “Lenders are coming out of their shells, and also sellers are getting tired of holding on.” Interestingly, Partner has seen increased demand from the commercial mortgage-backed securities segment.
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