Phase 1 Environmental Reports Up by 9%

Torrance, CA — The Western region of the United States experienced a nearly 9 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 Environmental Site Assessments are a unique indicator of real estate transactions, and thus of general real estate market conditions. “Based on Phase I ESAs, the West should see steadily increasing 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 #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 or 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 11 states of the West encompass Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming. In all, there were 11,814 Phase I ESAs performed in the first quarter in the west, up from 10,861 in the year-ago period. Nationally, 49,355 ESAs were conducted in the first quarter, an increase of 10.6 percent from the first quarter of 2011.

Among major metropolitan markets in the West, Salt Lake City was particularly strong with a 53 percent upsurge in Phase I assessments.

Southern California has been in steady recovery mode. For the whole year of 2011, Phase I ESAs were up 18 percent in the Los Angeles market compared to 2010, and up 19 percent in San Diego. The Orange County, CA market was also strong, up 31 percent. In the north, San Francisco Phase I ESAs were up 12 percent in 2011 over 2010. The state of California was up 9 percent.

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 a 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.