Just as one property differs from another, not every CRE transaction requires a Phase I ESA. Here are a few good reasons why Desktop Reports are an amazing alternative to traditional environmental due diligence.
Record Search with Risk Assessments (RSRA), also referred to as Desktop Reports are a cost-effective environmental risk assessment for Small Business Association (SBA) commercial property loans. RSRAs categorize the subject property’s environmental risk as either “LOW” or “ELEVATED.”
RSRAs deliver quicker results, decreasing the overall loan-to-approval time of a property deal. Extensive reports, such as Phase I ESAs, can delay closing times depending on additional variables, such as file availability and scheduling site reconnaissance.
Desktop Reports (RSRA) may be run on: 1) SBA or conventional loans that are $500,000 or less (however, have been used successfully on higher valuation conventional loans); 2) sites hosting activities that are not in the NAICS codes list of “Environmentally Sensitive Industries”; and 3) properties that typically don’t use hazardous chemicals or generate hazardous waste. Qualifying properties can be evaluated as quickly as three business days.
Where loan policy allows, an RSRA is a low-cost solution to a Phase I ESA for assessing potential environmental risk, even before a purchase offer or bid. An RSRA allows a lender or borrower to determine whether a property is suitable for immediate investment or requires further assessment before completing a purchase.
A Desktop Report is an excellent resource for evaluating an asset-light business when additional properties are involved in the transaction, updating a historical Phase I environmental site assessments, or to stress test a broad portfolio for potential environmental liability.
An increasingly popular use of the Desktop Report is to facilitate property refinancing. Particularly when a previous Phase I ESA was completed within the previous 24-months and business use has remained the same, a Desktop Report can quickly and economically allow an environmental professional to evaluate risk to a property.
Can an RSRA keep your transaction moving?
A desktop report help meet the environmental requirements of your loan.