4 Key Things to Know Before Purchasing Property for Redevelopment

25 Oct 4 Key Things to Know Before Purchasing Property for Redevelopment

In this video presentation, ESA President Chris Martell shares several important points for real estate developers and investors to consider before purchasing property for redevelopment in New York or New Jersey.

VIDEO TRANSCRIPT:

For more than 30 YEARS, ESA has been helping property developers, realtors, buyers, and sellers navigate the often complex environmental issues inherent in the sale and purchase of real estate in metro New York and New Jersey.

One of the most common errors we encounter when speaking with BUYERS is neglecting to ask a few simple questions before investing time and money in a property. These are the questions to ask before the formal due diligence process with your environmental consultant begins.

The first thing you want to know is whether or not due diligence has been performed on the property previously. If so, get a copy, and ask your environmental consultant to review it. Even though your consultant will do their own investigation, past due diligence reports can yield valuable information early in the decision-making process.

Next, ask what the property was used for most recently and into the past as far back as possible. Your environmental consultant will be able to tell you whether or not you should be concerned with the type of activities conducted at the site, and the types of contaminants that may be present as a result. In particular, sites involving the use of PFAS – an emerging environmental concern with very high cleanup standards — can be costly or impossible to attain Environmental compliance.

Another critical piece of information to find out before you make an offer is to determine if there are any outstanding NJDEP fines or enforcement actions attached to the property. How you negotiate the deal — and how much you’ll be willing to pay for the property — will depend on the answer.

Finally — and this is a really important point –make sure that the seller agrees to allow the buyer full responsibility for environmental compliance on the property without interference. We have seen numerous environmental remediation projects get derailed by dramatically increased costs and delays because the buyer agreed to third-party approval of the work performed.

Redevelopment is a costly and complex undertaking. ESA can help you navigate the environmental issues that are often encountered when buying or selling a commercial or industrial property. If you have questions or concerns about current projects, or if you’d like to know more about how ESA can help you protect your assets and improve your return on investment, visit AskESA.com or call Chris Martell at 732.469.8888 x206.

Stay safe. Stay smart. And Ask ESA.