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Many private investors and companies associated with the revitalization of potentially contaminated sites use an acquisition strategy that allows them to recapture value from environmental properties through the right combination of cleanup, revitalization, or repositioning of the property and insurance. Through this process, they may be able to recapture substantial value from properties that have high inherent worth by completing remediation and managing residual risks.

The investors work with parties involved in the transaction to determine their financial, risk management, and general corporate objectives. They typically use a detailed screening process to evaluate properties for acquisition, and then develop a comprehensive risk management strategy for acquired properties. The asset evaluation process typically addresses several aspects of the proposed transaction, including real estate attributes, environmental conditions of the property, suitable risk management strategies, financing alternatives, and the business structure through which the property would be acquired and revitalized.

The investor often takes an equity position in the transaction, working with the established debt and equity sources to take investment positions in the project. The investor will require that finance costs, including the cost of land purchase, site cleanup and restoration, insurance placement, and other carrying costs are secure before making the investment.

To determine the specific requirements for each transaction, investors evaluate the management of environmental and financial risks, including the property conditions, the deal structure, and the liability concerns of buyers and sellers. Risk management factors include the selection of remedy, regulatory options (including voluntary cleanup or prospective purchaser agreements), the legal structure of ownership, and investment participation.

Investors use a variety of transaction tools, including bonds, indemnities, guarantees, escrows, environmental insurance, and other mechanisms, to control and limit financial, technical, and liability risks. These mechanisms, in combination with innovative insurance programs and risk management strategies, limit project risks for investors.

The investor may use an analytical market-profiling approach to determine whether a property is positioned for its highest and best use. The profiling assesses the real estate attributes of revitalization constraints and the nearest-term, highest, and best alternative uses for the property. The profiling analysis includes:

The results of this profiling define potential ideal uses of the property and determine whether it is feasible to reposition the property in the market place. The end-users are identified, and an action plan for marketing the property is developed. Real estate that is poorly positioned in the marketplace may be of little or no value to an investor, even after the environmental contamination has been removed. Environmental property transactions can be presented to the capital markets, developers, and potential end-users both directly or through brokerage intermediaries. The process begins as soon as the property is placed under contract, as the investors often view the process as an essential element of due diligence.