HERE’S WHAT CRE TRANSACTION PARTIES NEED TO KNOW ABOUT THE PHASE I ESA STANDARD CHANGES.
If a change affects around 250,000 commercial real estate (CRE) transactions a year, you’d think that people would have heard about it. But given how phenomenally busy the CRE investment and finance space has been this year, many are not aware that there’s a big change coming – there is a new standard for Phase I environmental reports.
Most CRE transactions require a Phase I Environmental Site Assessment (ESA), which is a report that identifies existing and potential environmental contamination liabilities at a property. Every 8 years, the standard for these assessments (ASTM E1527) is required to be renewed, with revisions that are intended to clarify language, improve consistency in the report deliverables, and ensure that it reflects current “good commercial and customary practice.”
The widely used Phase I ESA standard is ASTM E1527-13 and the new standard is now ASTM E1527-21. The 2021 ESA standard is much the same as the 2013 one, but with some important changes that may affect you. So, what has changed since 2013? I’ve outlined the changes in this Globe St. article.