Environmental Due Diligence

due-diligencePeak offers environmental due diligence services to construction lenders, permanent lenders, mortgage bankers, REIT’s, real estate investors, corporate real estate departments, and independent property purchasers. The objective of Peak’s environmental due diligence services is to provide the user with a clear understanding of potential environmental liabilities associated with a real estate asset.

Consistent with our vision of using technology to the benefit of our clients, the majority of Peak’s due diligence reports are prepared using the PARCEL Platform for report production and delivery.  PARCEL is a powerful online report platform for authoring, managing, reviewing and delivering final due diligence documents. PARCEL’s many advanced features increase efficiency and enable improvements in report quality, consistency, and information value. Through the use of PARCEL and other cutting edge technologies, Peak is able to provide exceptional quality at affordable costs.

The environmental due diligence products and services provided by Peak are discussed in detail below.

Phase I ESAs

Peak’s environmental due diligence services include Phase I Environmental Site Assessments (ESAs) which are prepared in accordance with the American Society for Testing and Materials (ASTM) E1527-13 Standard Practice for Environmental Site Assessments, and the All Appropriate Inquiry (AAI) rule (effective November 1, 2006) developed by the Environmental Protection Agency (EPA).  Conducting a Phase I ESA in accordance with ASTM E1527-13 and AAI permits the user to satisfy one of the requirements to qualify for the innocent landowner, contiguous property owner, or bona fide prospective purchaser limitations on CERCLA (42 U.S.C. §9601) liability.

The Phase I will identify Recognized Environmental Conditions (RECs) in association with the site.  RECs are identified as:

The presence or likely presence of any hazardous substances or petroleum products in, on, or at a property: (1) due to release to the environment; (2) under conditions indicative of a release to the environment; or (3) under conditions that pose a material threat of a future release to the environment. De minimis conditions are not recognized environmental conditions.

In addition to identification of Recognized Environmental Conditions (RECs) that are within the Scope of the ASTM Standards, the standard Peak ESA includes an evaluation of Business Environmental Risks associated with Non-ASTM scope items such as Asbestos, Lead-Based Paint, Radon, Lead in Drinking Water, and Wetlands.  Other non-scope issues can be added at the client’s discretion.

Preliminary Assessment Reports

Peak’s environmental due diligence services also include the preparation of preliminary assessments and Preliminary Assessment Reports (PARs). Per the NJ Spill Compensation and Control Act (N.J.S.A. 58:10-23.11), to establish that a person had no reason to know that any hazardous substance had been discharged to a site, the person must have undertaken, at the time of acquisition, all appropriate inquiry into the previous ownership and uses of the property.  All appropriate inquiry per this standard means the performance of a preliminary assessment, and site investigation, if the preliminary assessment indicates that a site investigation is necessary.

The objective of a Preliminary Assessment is to identify “Areas of Concern” (AOC).  AOCs are defined as:

“..any existing or former distinct location where any hazardous substance, hazardous waste, or pollutant is known or suspected to have been discharged, generated, manufactured, refined, transported, stored, handled, treated, or disposed, or where any hazardous substance, hazardous waste, or pollutant has or may have migrated…”

Hybrid Solutions

In addition to standard Phase I and PAR report formats, Peak also prepares hybrid Phase I ESA/Preliminary Assessment Reports that meet both ASTM E1527-13 and NJ Spill Compensation and Control Act all appropriate inquiry criteria.

Transaction Screen Reports

Peak also prepares Transaction Screen Reports in accordance with ASTM E1528-06 Standard Practice for Limited Environmental Due Diligence: Transaction Screen Process.

Phase II Investigations/Remediation

Turnkey Phase II Environmental Site Assessments can be conducted by Peak Environmental in accordance with industry standards and based on project needs.  Examples of Phase II scopes of service include remote sensing investigations using geophysics to locate historic underground storage tanks or to inspect drainage systems; tank tightness tests to ascertain integrity; soil and groundwater sampling to confirm/deny discharges to the environment; Membrane Interface Probe studies for real time confirmation and delineation of volatile organic contamination of the subsurface; and soil vapor intrusion/indoor air quality assessments.

Dependent on the findings of the Phase II study and client needs, Peak is also positioned to remediate RECs and to bring the site into regulatory compliance.

General Consultation Services

Peak also provides environmental consulting services to support the due diligence process. For example, a common outcome of a Phase I ESA is the determination that an environmental liability is present that can be quantified.  Peak can provide a cost-to-cure estimate for the environmental liability present.

A Phase I ESA may determine that an environmental liability is present at the subject site that cannot be quantified without either performing an extensive Phase II investigation or actual remediation of the issue.  For these conditions Peak can provide a “worst case scenario” estimate for an environmental issue.

Peak will rely on extensive staff experience with various soil and groundwater remediation processes, and their associated costs, to prepare estimates.  A normal methodology during this process is to prepare an estimated cost associated with an issue and then apply a predetermined percentage factor to arrive at a worst case scenario figure.

Other similar services include consulting regarding public funding, insurance options and strategies, interpretation of technical or regulatory issues, communications with regulatory agencies, other consultants, and litigation support.

Third Party Due Diligence of Other Consultant’s Reports

Peak can provide a review of other consultant’s Phase I and II reports for not only adherence to the national (or client) standards but also to ensure that the reports have been prepared with sound environmental principles.  Peak will peer review the reports and provide the client with a letter detailing the findings.

The letter will review the findings, conclusions, and recommendations of a Phase I or II and determine if they are consistent with the information presented in the report and if they adhere to standard industry methodologies.  If a report does not meet standards or provides recommendations inconsistent with the information in the report, Peak will itemize each deficient item, provide an explanation why the item is deficient (what standard was not met), and provide a recommendation to remedy a deficiency.