Due Diligence Support
We have decades of experience with owner and lender requirements, including underwriting requirements for Housing and Urban Development programs, Fannie Mae, Freddie Mac, US Department of Agriculture, and other federal and state agencies and sponsored entities. We know how to scope and execute on due diligence to smooth the process for obtaining loan approvals and insurance policies, and to facilitate timely deal closing. We work with many large consulting firms to execute on larger projects and ensure that the best talent is available to meet your requirements.
- Environmental Phase I and Phase II site assessments, hazardous building materials review, and other property conditions
- Environmental Compliance and Permit reviews for high risk activities, industrial sites, and proposed infrastructure projects
- Property Resilience assessments for extreme weather and climate risks
- Product liability, historical liability analysis, and safer consumer products risk reviews for mergers and acquisitions
- Environmental liabilities and climate-related financial risk opinions of costs, materiality, and time horizons for reporting and disclosure
Portfolio Management Support
- Emergency and business continuity planning
- Pre-closing, post-closing and integration projects, schedule tracking, and verification
- Distressed asset assessment and strategic management for environmental and climate risks
Divestiture
- Disclosure packages
- Environmental indemnity agreement exit or sunset requirements to reduce tail liability
- Communications and site visit coordination
- Strategic investment to reduce tail liabilities
Post-Disaster Recovery and Loss Management
We have unique experience in planning and executing disaster recovery that integrates community, employees, and other stakeholders to reduce downtime and manage losses.
- Coordination with governmental and community recovery committees, including mitigation grants from federal and state agencies
- Crisis communications, incident tracking and reporting, and coordination across community, employees, customers, and other stakeholders
- Financial tracking, analysis, and insurance claim management
- Health and safety policies, procedures, training, and management for novel and often urgent activities after disaster to support supply chains, critical functions, and other business activities under post-disaster conditions
Assessing Risk vs Determining Compliance
Most due diligence activities focus only on those risks that materially impact the investment decision being made for a property. Take a look at any recent Phase I environmental site assessment and you’ll see a section on limitations that will specifically state that the report does not contain any determination of regulatory or statutory compliance. That’s because environmental firms tend to work at the national level with national standards, and the depth of a Phase I assessment does not include digging into the specific regulations that apply to a property or all the permits that may have been issued.
Under some environmental laws, an equity investor in a property takes on direct environmental liability as an “owner” even when there is a separate co-investor or tenant “operator” who is obtaining permits and conducting operations at a property. These are joint and several liability provisions that forever make the owner equally liable for non-compliance with laws relating to hazardous waste management and spills of hazardous substances. This introduces going-forward liabilities for investors that they may not even be aware of because this topic is not typically included in due diligence reports.
The time frame for the date of construction or major renovation, passage of new laws, and applicability of specific building codes can have a major impact on the conditions of a property and the specific obligations or liabilities of an owner or operator. But it can also make an impact on an investor’s exit options for a property. A lender’s decision to foreclose or take title to a property should always include consideration of that property’s code status and compliance status.