Commercial Real Estate Professionals can benefit from building a warm relationship with A3 Environmental Consultants. A good environmental consultant can help a CRE professional close deals that would otherwise have blown up at the first sign of a bad environmental report. Let’s discuss…
Sell-Side CRE Professionals:
Sell-Side CRE Pros often don’t believe there’s anything that an environmental consultant can help them with. This isn’t true.
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Get Ahead of the Problem.
If you representing a seller for a property that is obviously environmentally compromised the first thing you should do is discuss with the seller starting the environmental due diligence process before you go-to-market. The best defense is a good offence. This accomplishes several things discussed below. One of the most important benefits of starting early is having the seller psychologically metabolize they will have environmental expenses they might not otherwise have anticipated. This breaks down resistance to negotiating environmental contamination later in the process.
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Gain the Luxury of Time.
Time is the enemy of all real estate deals. Unknown environmental impacts on a property can scare away potential buyers before they’ve made an offer. But once a contract is signed, the unknown environmental impacts represent an unknown timeline to close the deal. Solve for the unknown and get a jump on fixing the problems to maximize the property value.
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Unknown Environmental Impacts Drive Property Value Down.
Unknown contamination, in addition to causing fear of lost time, regulatory reprisals, and legal liability also provide an opening for buyers to renegotiate prices down. Knowing the extent of any environmental impacts allows the seller to get a good idea of remediation costs, limiting the downside risk and pricing discount on a commercial property.
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Gnarly to Nice
Buy-Side Environmental Consultants Won’t Be Nice.
When a buyer enters into the due diligence period, if they are smart or if they need bank financing, they will perform a Phase I Environmental Site Assessment. The consultant who’s hired to represent the buy-side will almost assuredly not be nice to the seller. The first motivation is to please the buyer. In more disappointing cases, the motivation of the buy-side environmental consultant is to find every little problem in the hopes of being paid more billable hours to fix the “problem” they found. This dynamic blows up commercial sales routinely. To counter this, you should have your Phase I ESA done before you find a buyer and hand them the completed report for their review. Aside from being good marketing, it’s a marker of honesty and fair dealing which can help lubricate a deal.
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Environmental Professional Who Will Fight for You.
You don’t need me to tell you, so much of what happens in a real estate transaction is driven by ego and posturing. Environmental consulting is science. A3 Environmental is very good at science. When you are presented with bad environmental reports from the buyer, it might be real, or it might be BS. We can help interpret the meaning, and strategize solutions. Sometimes the solutions are as simple as having a conference call with the sellers consultant. Sometimes we negotiate to narrow a scope-of-work for further remediation. If necessary, we bid on the work ourselves to use price competition to drive down environmental costs. We can save your seller thousands of dollars and make you look like a hero.
Buy-Side CRE Professionals:
Environmental consulting companies take on personalities in much the same way people do. The personalities reflect the interests and motivations of the owners and managers. In our line of work there are typically three types of consulting personalities.
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Find Nothing Wrong.
These types of consulting companies are trying to curry favor with clients by never tripping up a deal. They are not the kind of consultants you want to work with because their shoddy work is inevitably double checked by better companies and their reputation suffers. In addition, the service they are supposed to provide, is to illuminate the risks that are being taken by the buyer and lender. If you find nothing wrong, you are loading up your client on risk they don’t know they are taking.
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Find Everything Wrong.
Sometimes the find-everything-wrong consultants are useful to buy-side CRE professionals and their clients because they offer opportunities to drive prices down. More often, they are not finding everything wrong at the direction of the client, they are motivated by management to find problems so they can charge more billable hours.
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Practice Good Science.
A3 Environmental Consultants was started by a woman who was tired of answering to managers that vacillated between find-nothing-wrong and find-everything-wrong. She has instilled in this company the ethos of a good scientist who will find real risks and work to mitigate them in the best, fastest, most cost effective way possible. She strives to have her work and the work of her 20 person staff, stand the test of time and be respected in the industry. If you’re a CRE Professional, we are the kind of company you put in your contact list on your cell phone and call with any questions you ever have.
We Fix Gnarly Environmental Problems
