Vapor Intrusion and Its Impact on Real Estate Transactions
Vol. 108 | January 24, 2017
Vapor intrusion is an emerging issue that is creating increasing headaches for owners and developers of commercial real estate as well as lenders. Litigation regarding vapor intrusion is on the rise and appears to be on the marketing radar of many trial lawyers.
Vapor intrusion may occur when volatile chemicals that have seeped into the soil or groundwater from leaking underground gasoline tanks, dry cleaners, or other chemical spills migrate into nearby buildings through cracks and openings in foundations, creating indoor air problems and potential health risks.
The presence of a vapor intrusion issue may result in an “out” for tenants seeking to exit a property, decreased property value due to real or perceived health risks, or difficulty in refinancing a property due to decreased risk tolerance by lenders.
The presence of a vapor intrusion issue on a property does not need to be a deal breaker, provided that the issue is properly addressed. When purchasing or refinancing commercial real estate, owners should ensure that an environmental consultant like Intertek-PSI is addressing vapor intrusion as part of a Phase I Environmental Site Assessment (ESA) and that they allow enough time in their schedules to address any identified issues.
Be aware that the chances of encountering a vapor intrusion issue on any given corner property (where current and former gasoline stations are likely) or retail strip center (where current or historical dry cleaners are likely) is very high. Service stations and dry cleaners have historically experienced leaks at a very high frequency.
As long as vapor intrusion is investigated and addressed as warranted, it need not result in any delay or roadblock in a property transfer.
By Steve Long, P.E., P.G.
Principal-in-Charge, Environmental Services
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