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March 3, 2014

OCC’s Advice for Lending on Contaminated Properties

By Partner ESI

IRA GROSSMAN DISCUSSES THE OCC’S UPDATED COMMERCIAL REAL ESTATE HANDBOOK’S ADVISORY TO BANKS DEALING WITH CONTAMINATED PROPERTIES

Environmental contamination can threaten loan repayment. The presence of contamination will affect the value of the property and the ability of the borrower to repay the loan. The measure of the impact will depend on the nature, time, and cost associated with the problem.

Failing to observe conditions at the asset can lead to unexpected problems for the lender. The Office of the Comptroller of the Currency (OCC) has published a revised version of the Commercial Real Estate Handbook in 2013. The requirements for the banks’ monitorying of environmental risk have changed significantly. I’m going to discuss some key points from the OCC CRE Handbook’s advisory to banks dealing with contaminated collateral.

Continue reading the GlobeSt blog here.

About the Authors

Partner ESI

Partner ESI

Founded in 2007, Partner Engineering and Science Inc., is the leading provider of engineering, environmental, energy, and construction consulting for the commercial real estate (CRE) industry. Touching 1 in 5 CRE transactions in the U.S., Partner is widely recognized as the largest and best provider of third-party physical due diligence reports, including Phase I Environmental Site Assessments, Property Condition Assessments, Seismic Risk Assessments, Zoning Reports, ALTA Land Title Surveys, and Construction Risk Management. Partner’s connectedness to the CRE market gives it an unparalleled view into CRE trends and risk management insights. Partner also provides a full suite of consulting services to support the entire real estate lifecycle, including: Geotechnical Consulting; Building Systems Consulting; Capital Management and Project Implementation Support; Environmental Health & Safety Consulting; Energy, Sustainability & Resilience Consulting; and Site Civil Engineering. With a responsive approach scaled for speed and agility, Partner helps clients manage risk, make smart investments, optimize asset performance, and win at their real estate investment strategies. Based in Torrance, Calif., Partner has over 1,400 employees in 40 offices around the globe.

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