If you’re buying commercial real estate, you’re not just purchasing walls and dirt — you’re inheriting its history. That means if the previous owner had a love affair with toxic solvents in 1972, you might be picking up the tab for the cleanup in 2025. This is where Phase 1 ESA and Phase 2 ESA enter the picture. These two ASTM-standardized investigations are the foundation of environmental investigations nationwide, protecting you from costly surprises, regulatory headaches, and the occasional radioactive raccoon.
Phase 1 ESA: The Audit Before You Buy
A Phase 1 Environmental Site Assessment (ESA) is essentially an environmental investigation without the white gloves. We start with a deep dive into databases, historical records, fire department files, and city archives. An environmental professional then visits the property, scanning for signs of past, present, or looming contamination — anything from an old underground storage tank to suspiciously green puddles. No soil or groundwater samples are collected at this stage.
If a Recognized Environmental Concern (REC) is identified, the Phase 1 ESA report will recommend further investigation. This is your first checkpoint — if we find nothing, you can move forward with confidence. If we find something, you’ll want a Phase 2 ESA before signing the dotted line.
Learn more about our Phase 1 ESA services
Phase 2 ESA: Testing for the Truth
The Phase 2 ESA moves beyond clipboards into the world of drilling rigs and lab coats. We collect soil, groundwater, and sometimes air samples from strategic points on the property. These samples go to an accredited laboratory, where they are analyzed for contaminants relevant to your location and property type. The resulting Phase 2 ESA report outlines the nature and extent of contamination, health and safety risks, and regulatory obligations.
Recommendations may include monitoring, remediation, or in rare cases, walking away from the deal. State, federal, county, and municipal regulations may influence both the testing process and the next steps.
Learn more about our Phase 2 ESA services
The So-Called “Phase 3” ESA: Cleanup & Compliance
While ASTM doesn’t officially have a Phase 3 ESA, the industry uses the term for remediation activities after a Phase 2 ESA confirms contamination. This can involve soil excavation, engineered barriers, biological treatment, or venting systems. These actions are often guided by programs such as the Leaking Underground Storage Tank (LUST) program or the Site Remediation Program (SRP).
Read about our remediation services
Environmental Investigations for Smaller Budgets
Not every property needs a full Phase 1 ESA. Lower-cost options include:
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Environmental Screens (ES): $250, database-only search.
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Record Search with Risk Assessment (RSRA): $850, SBA-compliant desktop review.
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Transaction Screen Assessment (TSA): $850, ASTM E1528-14 standard plus site visit.
These are faster and cheaper, but not suitable for all transactions.
CRE Buyers Should Care About Environmental Investigations
Environmental liabilities don’t respect state lines. Whether your investment is in Chicago, Houston, or a quiet town you can’t find on Google Maps, a Phase 1 ESA protects you from inheriting someone else’s contamination bill. Lenders, SBA, HUD, and USDA often require these reports before approving financing.
For commercial real estate buyers, an ESA isn’t just a box to check. It’s a legal and financial safeguard, ensuring your asset’s value isn’t eroded by an overlooked environmental nightmare.
Buying commercial real estate without proper environmental due diligence is like playing Russian roulette with your balance sheet. A3 Environmental Consultants conduct Phase 1 and Phase 2 ESAs nationwide, meeting ASTM standards and satisfying lender and agency requirements.
Call (888) 405-1742 or email Info@A3E.com to protect your investment before you close the deal.
