Phase 1 Environmental Site Assessment (ESA)
What Is a Phase I Environmental Site Assessment (ESA)?
A Phase I Environmental Site Assessment (ESA) is a detailed study conducted to identify potential or existing environmental contamination liabilities associated with a property. These assessments are an essential first step in the due diligence process for commercial real estate transactions, land development, or refinancing.
During a Phase I ESA, the property and its surrounding areas are carefully evaluated to determine whether current or historical activities may have caused contamination of the soil, groundwater, or structures.
What Does a Phase I ESA Include?
A Phase I ESA follows the ASTM E1527-21 Standard Practice for Environmental Site Assessments and typically includes:
- 🔶 Records Review – Examination of historical aerial photos, maps, environmental databases, and government records to identify past uses that may have created environmental concerns.
- 🔶 Site Reconnaissance – A physical inspection of the property and nearby areas to look for visual or physical signs of environmental issues (such as storage tanks, stained soil, or distressed vegetation).
- 🔶 Interviews – Conversations with past or present property owners, occupants, or local officials who can provide insights into previous site use.
- 🔶 Report Preparation – A comprehensive written report summarizing findings, identifying Recognized Environmental Conditions (RECs), and outlining recommendations for further action if needed. Reports are completed by an Environmental Professional or EP with decades of experience.
Why a Phase I ESA Is Important
- 🟠 Protects Buyers and Lenders: A Phase I ESA helps identify environmental risks before a purchase or loan closing—avoiding costly cleanup or liability later.
- 🟠 Satisfies Lender Requirements: Most banks and commercial lenders require a Phase I ESA as part of their loan underwriting process.
- 🟠 Legal Protection: A properly conducted ESA can qualify a buyer for “Innocent Landowner” protections under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
- 🟠 Informs Future Development: Knowing potential contamination issues upfront can guide redevelopment plans, site improvements, or remediation steps.
Who Needs a Phase I ESA?
A Phase I ESA is recommended (and often required) for:
- 🟧 Commercial property buyers and investors
- 🟧 Developers and builders
- 🟧 Lenders and financial institutions
- 🟧 Property managers and corporations acquiring or leasing industrial sites
- 🟧 Government or institutional property transactions
Phase I vs. Phase II ESA
If the Phase I ESA identifies possible contamination or Recognized Environmental Conditions, a Phase II ESA may be recommended. A Phase II involves soil, groundwater, or material sampling and laboratory testing to confirm or rule out contamination. While we do not perform Phase II work we might be able to offer some professional recommendations.
Trust Trace Inspections for Your Environmental Due Diligence
Trace Inspections provides independent, professional Phase I Environmental Site Assessments throughout Tennessee and surrounding states. Our assessments are clear, compliant with ASTM and EPA standards, and delivered promptly to meet your closing timelines.
We work with:
- Real estate professionals
- Lenders
- Attorneys
- Builders and developers
- Investors and municipalities
Trace Inspections, LLC excels at quickly completing our Phase I Environmental reports. Our usual turnaround is 10-12 business days, but we often finish them faster. The complexity of the inspection site and the amount of research needed mainly influence the completion timeline. Feel free to contact us for an estimated completion date for your property. Please contact our office for a quote and any additional information.
Call 615-302-1113
