Understanding Environmental Site Assessments (ESA)

In the ever-evolving landscape of commercial real estate, conducting an Environmental Site Assessment (ESA) is a critical step in the due diligence process. ESAs help identify potential or existing environmental contamination liabilities.

What is an Environmental Site Assessment?

An Environmental Site Assessment is a detailed examination of a property to identify any environmental conditions that may be a liability for current or future owners.

The assessment evaluates the land, underlying soil, and any structures for the presence of hazardous materials or contamination.

What is ASTM E1527?

ASTM E1527 is a set of guidelines developed by the American Society for Testing and Materials (ASTM) that outlines the standard practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process. It provides a framework for environmental professionals to assess the environmental condition of a parcel of commercial real estate with respect to the presence of hazardous substances or petroleum products.

What is an ESA Phase I?

Phase I ESA is the first step in the environmental due diligence process. It involves a comprehensive review of records, a site inspection, and interviews with owners, occupants, neighbors, and local government officials to identify potential contamination risks. The goal is to assess if there are any Recognized Environmental Conditions (RECs) associated with the property.

What is a Phase II ESA?

If Phase I ESA identifies potential contamination, a Phase II ESA may be recommended. This phase involves collecting soil, groundwater, and building materials samples for laboratory analysis to confirm the presence of hazardous substances. It’s a more detailed and invasive process aimed at quantifying the levels of contamination and assessing the risk to human health and the environment.

Who Conducts an Environmental Site Assessment?

Environmental Site Assessments are conducted by environmental professionals with the expertise in identifying and evaluating environmental risks. These professionals typically have a background in environmental science or engineering and are trained to adhere to the ASTM E1527 standard.

When Do You Need an ESA Done?

An ESA is crucial when acquiring commercial property, as it can identify potential environmental liabilities that could affect the property’s value or lead to significant cleanup costs. Lenders often require an ESA before approving financing to protect their investment. Additionally, conducting an ESA can provide buyers with peace of mind and protection against future environmental liabilities.

Resource List for Learning More About ESA

  1. American Society for Testing and Materials (ASTM) – Offers detailed information and training on ASTM E1527.
  2. Environmental Protection Agency (EPA) – Provides resources and guidelines on environmental assessments and contamination.
  3. State Environmental Agencies – Offer local insights and regulations regarding environmental assessments.
  4. Commercial Real Estate Development Association (NAIOP) – Provides resources and best practices for due diligence in real estate transactions.
  5. Environmental Consultant Firms – Many firms offer educational resources and services related to ESAs.


Conducting an Environmental Site Assessment is a critical step in the commercial real estate acquisition process, providing essential information about potential environmental liabilities. Understanding the scope and importance of ESAs, including the ASTM E1527 standards, Phase I and Phase II assessments, and knowing when and who should conduct these assessments, can help investors make informed decisions and mitigate risks.