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An Analysis of Tiered Environmental Due Diligence

What can be missed?

We recently contributed an article to CRE Finance World's summer edition detailing the analysis of a study on missed RECs for non-Phase I ESA due diligence products in multifamily properties. The Phase I Environmental Site Assessment (ESA), adhering to the ASTM E1527-13 guidelines, is considered the gold standard due diligence for adhering to the Environmental Protection Agency's All Appropriate Inquiry (AAI) rule and satisfying the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) requirement. However, many lower-risk sites, such as multifamily properties, choose to perform lesser scopes of environmental due diligence, such as a Transaction Screen Assessment (TSA). What are the risks of this strategy? How many recognized environmental conditions (RECs) can be missed? Our analysis reveals significant findings and a very interesting story.

To read our full article, download the PDF below.

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