BBJ conducts environmental due diligence for real estate transactions and mergers and acquisitions when real estate is part of the deal. Fortune 500 and Global 100 companies across North America as well as REITs and real-estate developers hire BBJ Group for all phases of environmental due diligence because of our comprehensive approach, technical expertise, and business acumen.
BBJ Group doesn't create deal value by being the cheapest environmental due diligence firm; we create it by thoroughly characterizing a site’s history, uncovering hidden assets and liabilities that less comprehensive approaches miss. Identifying these pertinent deal issues allows a purchaser to maximize the number of concessions at closing, such as escrow arrangements, insurance policies, indemnities, and purchase price reductions. As a result, BBJ Group's strategy minimizes left-tail risk for investors at the time of both asset acquisition and exit.
PHASE I ENVIRONMENTAL SITE ASSESSMENT (ESA)
In any transaction that involves real estate, an All Appropriate Inquiry (AAI) compliant Phase I ESA is recommended to provide buyer, seller, or financing entities a determination if potential environmental liabilities, such as recognized environmental conditions (RECs) and business environmental risks (BERs), exist at a target property.
The ASTM 1527-13 process involves a site reconnaissance, or “site-walk”, by a trained environmental professional, and a review of documents concerning the property including those found via environmental database searches and other publicly-available records to support the Phase I site assessment and determine the environmental liabilities for the site.
In some cases the Phase I ESA provides sufficient information to satisfy all parties regarding the on-site environmental liabilities, or lack thereof, but in other cases the Phase I ESA findings warrant a Phase II ESA to characterize more completely the extent of the environmental conditions identified in the Phase I ESA.
Phase II ESA procedures are designed to investigate the potential impact of RECs and involves on-site collection of samples for testing, and a comparison with local, state and federal standards. BBJ Group manages all aspects of the Phase II investigation, including:
If on-site investigations reveal contaminants are found above acceptable risk criteria, BBJ Group’s remediation management and services are designed to mitigate risks to human health and the environment in accordance with State and Federal regulations.
When transactions include the acquisition of operating businesses, limited compliance reviews (LCRs) are often performed in tandem with the Phase I ESA to review a facility’s environmental permits and operations. The purpose of the LCR is to identify on-site practices and processes and identify potential violations and deficiencies.
The LCR includes a site reconnaissance, review of client-provided documentation, and review of available online federal and state regulatory compliance databases to assess the facility’s operations and current compliance status that may be subject to the requirements of federal and state environmental regulations.
Often required in industrial and commercial real estate transactions, BBJ Group’s consultants provide property condition assessments or PCA’s along with environmental due diligence services. The PCA is performed in accordance with ASTM 2018-15 to assess a facility’s overall condition of the building envelope and structure, and the Mechanical, Electrical, and Plumbing (MEP) systems as they relate to base building operations.
The PCA includes a description of building elements, listing of items confirmed by local building and fire authorities as not being in compliance or anticipated as not being in compliance with applicable code, and a listing of elements exhibiting deficiencies with probable repair costs. Where practical, quantities and unit costs are indicated, causes and possible solutions are discussed and additional description is provided to assist the client in assessing the impact of the observed condition.
Additionally, BBJ Group has assisted many clients with in-building environmental health concerns such as asbestos, lead-based paint, lead in drinking water, and radon gas. BBJ Group provides the necessary testing and abatement of these hazards, which allows clients to proceed with their construction and renovation plans. We also help clients manage ongoing environmental concerns, by developing radon mitigation options, and developing Asbestos Operations and Maintenance Programs.
In addition to our in-house experience, BBJ Group uses professionals in these fields, such as Certified Industrial Hygienists, licensed asbestos and lead inspectors, and asbestos project designers. This breadth allows BBJ Group to deliver results cost-effectively, with appropriate emphasis on nuanced local regulations, as well as more prevalent state and federal standards.
BBJ Group has experience performing environmental due diligence audits nationwide on large portfolios and single sites. The work is completed in a timely manner that meets the transaction’s schedule, with regular, jargon-free updates that reduce surprises at the closing table. Other environmental companies and consultants may stop at delivering a report, whereas BBJ Group’s consultants go beyond the Phase I ESA to support client’s business goals.
BBJ Group has proven experience and knowledge of the standards and practices involved in performance of Phase I and Phase II ESAs, including the American Society for Testing and Materials (ASTM) Standard Practice 1527-13 and U.S. EPA Regulations for All Appropriate Inquiry (AAI) 40 CFR Part 312.
Kevin McCartney, P.G.