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Commercial Phase 1 Inspection


Commercial "Phase 1 Inspection"
What is a Phase 1 and Do I Really Need One?
When it comes to a Commercial Inspection, many clients are told they may need a Phase 1 Inspection. The question asked is “What is the purpose of a Phase 1?”; “What does a Phase 1 inspection cover?”; Is it included in a standard inspection?”; “Can the same inspection company do a standard and a Phase 1 inspection?”
These are all great questions. To start off, I feel it’s important to understand the definition of a Phase 1 ESA. To do this, let’s go to the definition from Wikipedia:
An Environmental Site Assessment is a report prepared for a real estate holding which identifies potential or existing environmental contamination liabilities. The analysis, often called an ESA, typically addresses both the underlying land as well as physical improvements to the property. Contaminated sites are often referred to as "brownfield sites." In severe cases, brownfield sites may be added to the National Priorities List where they will be subject to the U.S. Environmental Protection Agency's Superfund program.
Actual sampling of soil, air, groundwater and/or building materials is typically not conducted during a Phase I ESA. The Phase I ESA is generally considered the first step in the process of environmental due diligence. Standards for performing a Phase I site assessment have been promulgated by the US EPA[1] and are based in part on ASTM in Standard E1527-05.[2]
If a site is considered contaminated, a Phase II Environmental Site Assessment may be conducted, ASTM test E1903, a more detailed investigation involving chemical analysis for hazardous substances and/or petroleum hydrocarbons.
When explaining the process to clients it’s also important to understand the purpose of a Phase I inspection (ESA). GAEA Environmental Services writes “the purpose of a Phase 1 Inspection  is to identify, to the extent feasible, recognized environmental concerns in connection with the property. This assessment included a site reconnaissance as well as research and interviews with representatives of the public, property management, and regulatory agencies.”
A Phase 1 inspection entails a very involved and detailed site visit by a qualified professional. Many Commercial inspection companies can do both a standard inspection as well as a Phase 1 inspection.  When doing a Phase 1 inspection, the inspectors are looking for potential risks. These potential risks can be anything from a past gas station on or near the site that might have contaminated the ground water to there having been a dry cleaner on the site that might have spilled chemicals into the ground. There could have been past dumping on the site or an auto repair that did not handle the oils properly, lead in the paint, asbestos, and on and on. Overall, the focus of a Phase 1 inspection is environmental not structural. Many lending institutions require a Phase 1 clearance before they will lend money.
In addition to a Phase 1, there are two other aspects that may come into play depending on what is found during the Phase 1 inspection and research. These are Phase 2 and Phase 3. Both Phase 2 and Phase 3 are more involved in the aspects of the environmental field. Phase 2 involves testing of the site such as coring into the earth and taking samples of the soil along with testing it to determine what is in the soil. The information during a Phase 2 will determine if the site warrants further investigation and/or to be remediated. If remediation is needed then starts Phase 3.
Each environmental Phase whether it is Phase 1, 2 or 3, has a very involved set of industry standard requirements. Each requires highly trained professionals to do properly. This is not an area to skimp on. Have a reliable company with vast experience do your Phase 1 inspection. Getting the cheapest deal for something this important I feel could easily be fiscally irresponsible. A properly done Phase 1 inspection really is for everyone’s protection not just the buyer.
For more information contact Phill Tomlinson, Associate Broker with Commercial Properties, Inc. at
Phill Tomlinson, Associate Broker
Commercial Broker, Sales and Leasing in Arizona
Landlord and Tenant Representation in Arizona
Commercial Properties, Inc.
7025 N. Scottsdale Road, Suite 220
Scottsdale, AZ 85253
Direct: 480-522-2800
Cell: 480-330-8897
Fax: 480-348-1601
Sales and Leasing Commercial Broker
Specializing in:
 Landlord Representation and Tenant Representation
Office, Medical, Retail and Industrial Space
Commercial Properties, Inc.
7025 N. Scottsdale Road, Suite 220
Scottsdale, AZ 85253
480-522-2800 Direct
480-348-1601 Fax
480-330-8897 Cell
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Commercial Properties, Inc.
7025 N. Scottsdale Rd, #220
Scottsdale, AZ
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The information contained herein has been obtained from various sources. We have no reason to doubt its accuracy; however, J J Commercial Properties, Inc. has not verified such information and makes no guarantee, warranty or representation about such information. The prospective buyer or lessee should independently verify all dimensions, specifications, floor plans, and all information prior to the lease or purchase of the property. All offerings are subject to prior sale, lease, or withdrawal from the market without prior notice.
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