For Complex Projects, Accessing Environmental Expertise Is Essential For Lender Success
Earlier this year, a lender came to EBI Consulting with a complex situation. The lender was working on acquiring funding for a 32-floor, 345-unit mixed-use multifamily property with restaurant space on the ground floor and was partnering with Fannie Mae on underwriting for the property.
The issue was that the property is in New York, and the lender knew that due to state regulations and Fannie Mae’s requirements, it would need to perform a Phase 1 Environmental Site Assessment in order to move forward.
An ESA is an investigation of a property's current and historical use to identify recognized environmental conditions that may impact its value. Some of these conditions include potentially harmful elements such as lead, asbestos, mold, radon or pesticides.
If an assessment is done incorrectly and something is missed, it could result in millions of lost revenue for all project stakeholders. But for this particular project, the lender knew to turn to EBI Consulting — which provides architecture, engineering, due diligence and environmental sustainability services to organizations across the country — because it had worked with EBI in the past and knew the firm has expertise in these types of complex projects.
Adrienne Perez, EBI program manager, Freddie Mac/Fannie Mae Services, said that over the years EBI has been able to help many lenders efficiently navigate the state and regulatory complexities associated with multifamily mixed-use property transactions.
“It’s always satisfying when clients recognize the value we bring to the table and put their faith in us to help make the underwriting process as seamless as possible, especially on properties that may have environmental issues that may increase risk and impact property value,” Perez said.
The site the property was on was previously used for industrial purposes. During its assessment, the EBI team discovered a controlled recognized environmental concern as the result of this former use. There was already an ongoing site management plan in place for the property, and EBI worked to make sure the lender could continue to adhere to it so it could move forward with plans for the new development while complying with all regulations and Fannie Mae’s requirements
“New York is a highly regulated state, so we knew we had to go above and beyond while acting as the liaison between the client and Fannie Mae to ensure all parties were satisfied and understood the history, previous investigations and continued maintenance needs,” Perez said.
Along with continuing to follow the ongoing site management plan, EBI recommended that its client implement engineering and institutional controls along with sampling and reporting to ensure full property and environmental compliance.
EBI has a long history of working with organizations including Fannie Mae, Freddie Mac and the Department of Housing and Urban Development, acting as a liaison between project stakeholders to ensure compliance with any and all state and federal regulations.
This article was produced in collaboration between Studio B and EBI Consulting. Bisnow news staff was not involved in the production of this content.
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