What a Real Estate Investor Needs to Know about Vapor Intrusion
First thing first, what is vapor intrusion? Vapor intrusion is when volatile chemicals come up through the floor of the building and enter the building space—and has been the new thing to worry about in the environmental world for the past few years.
Environmental consultants have always addressed this issue, but in the past decade scientific models and state regulations have shown that rather small amounts of vapors in the breathing zones cause cancer—I always feel a bit alarmist when I say it causes cancer, carcinogenic vapors coming through the floor may cause cancer at a rate proportional to that of second hand smoke.
Anyway, real estate investors should pay attention to this reason for a few reasons:
1) Vapor Intrusion can cause a closed regulatory case to get reopened (if vapor intrusion wasn’t adequately addressed) and if you do need to do cleanup, you may spend more effort on addressing the vapor issue than on addressing threats to groundwater;
2) Tenant Concerns: A tenant could site an unsafe space as a reason to break a lease. Also, a larger issue could be a tenant that is sensitive to chemical exposure such as a day care or other education tenant, or a tenant that is sensitive to the potential reputational risk such as a corporate or government tenant.
3) Safety First: I feel bad for clients when they have to spend money to meet the requirement of some random regulation, but money spent at addressing real human health concerns is smart money.
Okay, so as a real estate investor or lender you understand the most basic thing about Vapor Intrusion, now what do you need from your environmental consultant? A Phase 1 Environmental Site Assessment (ESA) will identify Recognized Environmental Conditions, which should include any Vapor Intrusion Conditions.
In the event that the Phase 1 ESA recommends Phase 2 Environmental Testing for a potential Vapor Intrusion Condition then the geologist or engineer designing the Phase 2 Environmental Testing scope should consider collecting samples in vapor phase (a. k. a. soil vapor samples).
Some of my colleagues have thought (or hoped) that this would be the next big thing driving environmental work. I don’t think it is that big of a deal, but is certainly a change in the state of the world that requires attention.
If you want more information on Vapor Intrusion, here are a couple good resources:
Be sure to check out Partner Engineerings webinarDevelopment is Back! Mitigate Risk with Due Diligence NOW ON DEMAND for an in-depth look at the key engineering, environmental and energy due diligence items that can identify potential "fatal flaws" to a development or redevelopment project and help to prevent them. Click here to download.
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Partner Engineering and Science, Inc. (Partner) is a full-service environmental and engineering consulting firm completing projects nationwide. We specialize in evaluating properties in connection with real estate transactions, development or management.