Industrial property transactions often involve unique environmental considerations that can affect property value, financing, redevelopment potential, and future liability. Historical operations, contamination, permitting obligations, and regulatory requirements should be evaluated before completing a purchase or sale.

Why are environmental issues important during industrial property transactions?

Environmental conditions may influence purchase negotiations, financing, redevelopment plans, insurance, lease obligations, and regulatory compliance. Identifying potential concerns before closing helps parties better understand risks and allocate responsibilities appropriately.

What environmental due diligence should buyers consider?

Due diligence commonly includes a Phase I Environmental Site Assessment, review of historical property uses, regulatory database searches, site inspections, prior environmental reports, and, where appropriate, a Phase II Environmental Site Assessment or additional investigation.

What risks should sellers understand?

Sellers should understand existing environmental conditions, regulatory obligations, prior remediation activities, permit status, disclosure requirements, and documentation that may be requested during the transaction process.

How can historical contamination affect a transaction?

Historical contamination may require additional investigation, regulatory coordination, remediation, institutional controls, engineering controls, or other site-specific measures. The presence of contamination does not necessarily prevent a transaction, but it can affect timing and negotiations.

Common misconceptions

Older industrial properties are not automatically contaminated, and newer properties are not automatically free from environmental concerns. Environmental liability is often more complex than simply identifying the current property owner.

Key Takeaways

  • Perform environmental due diligence before closing.
    • Review historical property uses.
    • Evaluate regulatory obligations.
    • Understand potential environmental liability.
    • Coordinate environmental, engineering, and legal professionals throughout the transaction.

When should you contact an attorney?

Consult an environmental attorney before purchasing or selling industrial property, negotiating environmental contract provisions, responding to NJDEP issues, evaluating contamination, or planning redevelopment.

Contact The Law Office of Alan S. Ashkinaze

The Law Office of Alan S. Ashkinaze represents buyers, sellers, developers, lenders, and industrial property owners throughout New Jersey in environmental due diligence, transactions, remediation, permitting, redevelopment, and environmental compliance matters.