Importance of Strong Partners

Most of the success stories we discuss are about specific deals but this time we are going to focus on the importance of the strong relationships developed with third party vendors. For this case, the focus is on the environmental due diligence provider for commercial real estate transactions we often utilize.

At the end of this article you should have a better understanding of how the lender (USFC) and client both benefit from selecting due diligence providers that are rated among the top in their field.

As part of our normal underwriting due diligence we engaged an environmental firm we often partner with for SBA transactions- PM Environmental, Inc. We began with a records search and risk assessment (RSRA) as the minimal level of due diligence permitted by the SBA. For this PM Environmental looked at aerial photography images, historic directories and some city records to see what the previous uses the subject property has had. If, for instance, there was a chemical company on the property back in the 1960’s it would require further due diligence.

Come to find out, the results of the RSRA  indicated that we would need to continue our environmental due diligence and conduct a Phase II environmental study. This means that soil boring samples would have to be collected and sent to a lab for analysis. This can cost anywhere from $5,000 to $10,000 and beyond. If the Phase II still showed contamination that is above the maximum levels permitted by the state then remediation (removal and/or containment) would also be required.

Without asking them to, PM Environmental, Inc. researched the county of Lenawee and discovered that grants were available for this scope of work. Unfortunately, they also found out that the only approved environmental company that can utilize the grant in the county was a competitor.

PM Environmental was willing to give business away to a competitor because it is the right thing to do for the client.

As a result, the client will now be eligible for the grant to cover 100% of the costs of the environmental work required.

At USFC we are not only committed to being experts in our respective areas but we also utilize only the best partners in their respective industry. Being consistent with our own philosophy, here at united, it’s important that we seek out partners that  we can thoroughly trust and have confidence that they will always do what is right for the client.