Comprehensive Environmental Response, Compensation and Liability Act – CERCLA

Also known as the “Superfund” law, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) was enacted in 1980 and, among other things, gave the federal government the ability to respond to releases or threatened releases of hazardous substances, and to pursue polluters (“responsible parties”) or potential polluters (“potentially responsible parties”) for the cleanup of contaminated sites.

CERCLA created the need to conduct “all appropriate inquiry” prior to a property transaction to qualify for exemption from CERCLA liability for cleanup costs.

CERCLA was amended by the Superfund Amendment and Reauthorization Act (SARA) in 1986.

What Exactly is Probable Maximum Loss?

A Probable Maximum Loss report (PML) is an important tool used to evaluate how a building may behave during a seismic event, which in turn helps determine the buildings financial risk. Real estate investors, developers, property owners, and lending institutions need this information to make informed decisions regarding assets, especially in earthquake prone areas.

The methods engineers use to calculate PMLs can vary greatly. The American Society of Testing Materials (ASTM) standards created in 2007, ASTM E2026-07 Standard Guide for Seismic Risk Assessment of Buildings and ASTM E225 Standard Practice for Probable Maximum Loss (PML) Evaluations for Earthquake Due-Diligence Assessments, have helped create consistency but more detailed information about the needs of the client can have a deciding factor in which method an engineer may use to calculate a PML.

Characteristics such as building type, critical connections, local soil conditions and local seismic activity are evaluated and used to calculate the PML value, which is expressed as a percentage of the dollar value of the damage in terms of the building’s replacement cost.  This can be calculated for a 50 year earthquake and a 475 year earthquake (the difference is in magnitude and the analogy of 10 and 100 year floods is often made). These factors, along with statistical data and observed damage to unreinforced buildings, go into widely used and accepted formulas to derive a theoretical model.  The PML report predicts the amount of potential damage a building will sustain when each of these 50 and 475 year earthquakes occur.

It should be noted that the PML estimates the likely cost of damage to a property due to a probable seismic event, not guarantee how the property will perform. The PML report actually reads as such, expressing seismic damage as a percentage intended to represent expected damage of a building divided by the replacement cost of the whole building. Many lenders have a pass or fail type system with the PML percentage. Generally, a building with a PML lower than 20% is acceptable and one with a PML over 20% is considered to have more risk and may require mitigation in the form of insurance or retrofitting, both of which can be expensive.

 

For upcoming webinars on Seismic Risk Assessments, PMLs and commercial real estate due diligence, visit http://www.partneresi.com/partner-webinars.php.

Commercial Real Estate Due Diligence in Philadelphia

The Partner Philadelphia office provides Phase I Environmental Site Assessments, Phase II Environmental testing, Property Condition Assessments, and Asbestos Surveys in support of commercial real estate transactions. Partner Philadelphia staff is experienced with the numerous variables and approaches associated with Pennsylvania Act 2 (the Land Recycling Program) and unique environmental issues local to Pennsylvania, such as Marcellus natural gas drilling.

Partner often customizes reports to meet individual client or agency lender’s (Fannie Mae, Freddie Mac) requirements and recognizes the complex geology and hydrology of Pennsylvania.

While conducting a Phase I ESA, Partner does a visual evaluation of accessible areas for the presence of Asbestos Containing Materials (ACMs). Should it become evident that ACMs may be present, Partner can perform sampling and testing to evaluate if ACM is in fact present.

Partner performs Phase II Environmental Testing either in support of a financing decision or to meet the requirements of the Pennsylvania Department of Environmental Protection. Most of our reports are performed to meet the standards set by ASTM E1903-27(2002).

A zoning report is a necessary part of many real property transactions because the current owner is responsible for existing zoning violations. Partner’s Zoning Reports take usage regulations, Philadelphia and municipality provisions into consideration as well as other regulations, such as the Americans with Disabilities Act.

Partner has completed engineering assessments on all types of commercial real estate including office, retail, multi-family, industrial, and hospitality. Some recent Pennsylvania projects and experience include:

Partner has completed Phase I Environmental Site Assessments, Phase II Environmental Testing, and radon screening for a portfolio for 23 chain hotels across Pennsylvania (Bethlehem, Danville, Harrisburg, Malvern, Moosic and Shamokin Dam) and several other Northeastern states.

Partner conducted 24 Phase I Environmental site Assessments of medical facilities in Pennsylvania (Bethel Park, Clearfield, Dresher, Greensburg, Hazel Township, Lower Burrell, Monogahela and Norristown) and several other states for US Bank.

 

For more information regarding Partner’s Philadelphia practice, visit http://www.partneresi.com/city/philadelphia.php

Environmental Due Diligence in Utah

The Partner Utah office provides Phase I Environmental Site Assessments, Phase II Environmental testing, Property Condition Assessments, and Asbestos Surveys in support of commercial real estate transactions, taking into consideration Utah’s diverse geology, climate, and topography.

Partner often customizes Phase I Environmental Site Assessment reports to meet individual client or agency lender’s (Fannie Mae, Freddie Mac) requirements.

In addition to providing Phase I ESAs, Partner provides Property Condition Assessments and Commercial Building Inspections for a wide variety of clients, including CMBS lenders, Fannie Mae/Freddie Mac lenders, and equity clients. Most of our reports are performed to meet the standards set within ASTM E2018-08 guidelines.

Partner performs Phase II Environmental Testing either in support of a financing decision or to meet the requirements of the Utah Environmental Protection Agency (UEPA). Most of our reports are performed to meet the standards set by ASTM E1903-27(2002).

Utah’s Department of Environmental Quality requires that any consultant that provides advice or makes conclusions regarding underground storage tanks for a fee to have a Certified UST Consultant License. Soil and groundwater samples collected at underground storage tanks should be collected by a certified Soil and Groundwater Sampler otherwise, the DEQ will not accept the results. This can be important if the results are ever needed to try to gain site closure.

Partner has completed engineering assessments on all types of commercial real estate including office, retail, multi-family, industrial, and hospitality. Some recent Utah projects and experience include:

Partner completed Phase I Environmental Site Assessments, Phase II Environmental Testing for four national chain auto repair facilities in Vernal, UT.

Partner’s Construction Risk Management team completed Document & Cost Reviews and regular Construction Progress Monitoring for 6 sites in Utah including offices and a big box retailer.

 

For more information on Partner’s practice in Utah, visit http://www.partneresi.com/city/salt-lake-city.php

Phase I ESAs in Baltimore

The Partner Maryland office provides Phase I Environmental Site Assessments, Phase II Environmental testing, Property Condition Assessments, and Asbestos Surveys in support of commercial real estate transactions. The Partner Baltimore staff is familiar with the widely variable geology across the state of Maryland, from the Atlantic Continental Shelf Province to Appalachian Plateaus. Partner also understands the concerns unique to Maryland, such as historical industrial areas and high radon areas.

Partner often customizes Phase I Environmental Site Assessment reports to meet individual client or agency lender’s (Fannie Mae, Freddie Mac) requirements and understands the multiple county and municipal regulatory bodies throughout Maryland.

While conducting a Phase I ESA, Partner does a visual evaluation of accessible areas for the presence of Asbestos Containing Materials (ACMs). Should it become evident that Asbestos Containing Materials may be present, Partner can perform sampling and testing to evaluate if Asbestos Containing Material is in fact present.

Partner performs Phase II Environmental Testing either in support of a financing decision or to meet the requirements of the Maryland Department of the Environment (MDE). Most of our reports are performed to meet the standards set by ASTM E1903-27(2002).

Some recent projects and experience that provide insight into our Maryland consulting practice include:

• Partner performed Phase I Environmental Site Assessments for a portfolio of 36 gas stations throughout Maryland (Beltsville, Bladensburg, Bowie, Capitol Heights, Clinton, College Park, District Heights, Fort Washington, Greenbelt, Hyattsville, Landover, Lanham, Laurel, Temple Hills, Riverdale, Suitland and Upper Marlboro).

• A Health Technology center located in Baltimore, MD requested Partner conduct a Phase I Environmental Site Assessment and Property Inspections, including subspecialist inspections of MEP (Mechanical Electrical and Plumbing), roofing, elevator and structure, as well as provides a Property Condition Report.

 

For more information on Partner’s Baltimore practice, visit http://www.partneresi.com/city/baltimore.php

Environmental and Engineering Due Diligence in Denver

Since 2010 Partner has completed 749 projects across Colorado with 165 in Denver. The Partner Colorado office provides Phase I Environmental Site Assessments, Phase II Environmental testing, Property Condition Assessments, and Asbestos Surveys in support of commercial real estate transactions.

Partner is the national leader in Phase I Environmental Site Assessments by volume. Most reports are performed to meet the standards of ASTM E1527-05. Partner often customizes reports to meet individual client or agency lender’s (Fannie Mae, Freddie Mac) requirements.

In addition to providing Phase I ESAs, Partner provides Property Condition Assessments and Commercial Building Inspections for a wide variety of clients, including: CMBS lenders, Fannie Mae/Freddie Mac lenders, and equity clients. Most of our reports are performed to meet the standards set within ASTM E2018-08 guidelines.

Partner performs Phase II Environmental Testing either in support of a financing decision or to meet the requirements of the Colorado Environmental Protection Agency (CEPA). Most of our reports are performed to meet the standards set by ASTM E1903-27(2002).

Colorado has their own Hazardous Waste Act (CHWA) separate from federal laws with independent authority to regulate and enforce cleanup. Partner Denver staff is familiar with CHWA specifications and can navigate Colorado clients through the process if needed.

Partner performs radon testing and consulting services for a variety of commercial and multi-family residential properties. The Partner Denver staff recognizes that many Colorado counties fall within the EPA’s Radon Zone 1 and could potentially have high levels of radon, representing a concern to indoor air quality.

For recent projects and experience that provide insight into our Colorado consulting practice visit http://www.partneresi.com/city/denver.php