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Nova Consulting Group |
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December 8, 2014 Issue |
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The Most Powerful Name In Corporate News and Information |
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Environmental Engineering for Commercial Real Estate Transactions |
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CEO
Nova Consulting Group
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – December 8, 2014
CEOCFO: Mr. Cummings, your website indicates “Innovative Solutions For Manmade and Natural Environments.” What is the focus at Nova? Mr. Cummings: Nova is an environmental engineering firm. The majority of our services center around commercial real estate transactions, development and redevelopment. We service both the private and public sectors on real estate issues pertaining to environmental and engineering concerns. We are a multidisciplinary consulting firm that provides due diligence services for commercial real estate acquisition and then offer a wide variety of services to assist clients in addressing the issues discovered during the due diligence process.
CEOCFO: Would you give us an example of a typical project? Mr. Cummings: A typical project for us would be providing due diligence services for a buyer or a lender of real estate on the environmental and/or engineering issues related to that property. We look for any potential issues that might exist for that property on the environmental side that a lender or buyer needs to be aware of before transacting on the property. We perform Phase I Environmental Site Assessments where we review past historical uses to determine if there are any concerns that need to be addressed from an environmental standpoint. For example, did the past use of the property include an industry that used chemicals, which could have been released and potentially impacted the site. We also inspect the condition of the building going forward to determine what costs will be incurred to maintain the property over the term of the loan. This type of review includes evaluating the building components such as the mechanical systems, the electrical setup, building structure, etc. to determine what the property condition and future reserves are necessary to maintain the property. We also assist clients in assessing compliance with environmental laws and regulations for industries and public entities. We often are asked to audit their processes and assist them in their compliance with regulations.
CEOCFO: When you are assessing a building what might you look at from the structural and environmental side that others might not realize makes a difference? Mr. Cummings: You would not always realize that offsite concerns or past uses of that property could affect the property today. For instance if there was an old dry cleaner site on the property that would have potentially released chemicals into ground water, the soil around the property today could have been impacted by these past uses. Underground storage tanks installed in the past could still be present and pose threats of deterioration and eventual discharge into the ground and water. Another example could be the presence of hazardous building materials like asbestos. If a client has plans for major renovations at a property, they need to understand the potential costs involved with the removal of existing materials. Those are the kinds of things that most people would not always consider when they are considering buying a building or a piece of property.
CEOCFO: What is your geographic range? Mr. Cummings: We are a global company with offices and personnel located throughout the United States as well as Canada, Europe, Japan and Australia. We are expanding our international capabilities and opening additional offices overseas in the upcoming year and are also beginning to provide services in Mexico.
CEOCFO: How do you keep up with not only the regulations but the trends and what the environmental agencies might think of down the road that they are not talking about now? Mr. Cummings: It is different in every state and in every country, depending on what their particular issues are that they find very important and impacting their regions. We hire good local individuals to head up our offices who know the local regulations; they know business cycles in those areas.
CEOCFO: Do people come to you because of your large reach or because you are known locally? Mr. Cummings: We have many local regional clients as well as national and international clients. Our national and multinational clients have projects globally and the fact that we know their particular requirements and their risk tolerance, we are able to service them well no matter where they are operating. We also have many local regional clients who appreciate the local office presence in their regions and expertise that we can bring.
CEOCFO: Who is your typical clientele? Mr. Cummings: Our clients range from large institutional clients, life insurance companies, Wall Street companies, large banks to local banks, as well as developers, property owners, schools, hospitals, and other public sector clients, etc.
CEOCFO: How do the assessments break down between physical inspection and paperwork trail? Mr. Cummings: A typical project requires approximately two to three weeks to complete. The onsite visits for a particular property typically takes a day or two, depending on the size and nature of the site. The remainder of the time is spent researching the property use, interviewing people and agencies familiar with the site and then interpreting and opining on the results of our site visit and research.
CEOCFO: Is it difficult to find some of the older records or is it easier today with the technology to see the history of a building? Mr. Cummings: It is definitely easier today, especially in the US but in certain countries it is quite a bit more difficult and takes more effort and time to obtain that information. For instance, in Mexico, it does take a bit longer and the records are not quite as thorough.
CEOCFO: Are there some areas that you think people should be concerned about but tend to overlook? Mr. Cummings: Typically, people perform the due diligence on the larger, more expensive properties for large portfolios because the cost of the due diligence is a small percentage of the overall value of the loans. When you have less expensive properties sometimes due diligence is not done and people will forgo the environmental assessment. However, the same environmental concerns exist on the smaller properties as well as the larger properties. If the due diligence is not performed on the smaller properties, the ramifications of issues that may not have been addressed can be costly and have a higher impact. On smaller properties, the costs to correct could be a higher percentage of the property value and have a larger negative impact than on the larger properties where the costs to correct could be a smaller percentage of the property value. So, in our experience, it is worthwhile to perform the due diligence whether it is an expensive or small property.
CEOCFO: Is there much competition? Mr. Cummings: It is a very competitive industry. We obtain our clients usually through recommendations and word of mouth. If we do good work, our clients recommend us. That is how we have grown. We also continue to expand our corrective and hazardous material management services, so that we can meet more of our client needs as issues arise on a property. We continue to expand our services to better assist our clients in correcting the issues discovered during the due diligence.
CEOCFO: What is an example of what you do today that you did not do a year or two ago? How are you improving client service? Mr. Cummings: Our turnaround time has become shortened as clients are requiring services on a much quicker, more last minute transactions. Our goal has been to shorten the turnaround time yet maintain our quality and consistency. Being global, we constantly work on ensuring our work product is very consistent no matter who we are doing it for and where we are doing it, so that if one office is working with a client it does not look different than another office.
CEOCFO: Corporate giving is important for Nova; why is it important for the organization and where do you focus your efforts? Mr. Cummings: Giving back to our communities is part of our DNA at Nova to work with different charitable organizations that are important to our people. Our employees are very philanthropic and it is important that their organization is as well. We support our employees by matching contributions and giving them paid time off to volunteer at their favorite charities and organizations. We do not dictate which charities we support through our employees time and our matching contributions, but leave it to the individual employee’s choice. Our employees are passionate about their own individual causes and organizations and we want to continue to fuel their individual efforts.
CEOCFO: How might Nova be different a year from now? Mr. Cummings: My hope is that we are a larger, better organization than we are today. We are looking at opening more offices and to continue our growth. We will continue to expand our footprint and our ability to service clients nationally as well as internationally.
CEOCFO: What should people reading about Nova Consulting take away? Mr. Cummings: We are a client-driven company and we are always keeping our focus on the client. Our goal is to listen to their needs and then develop services to meet those needs. We are always changing and expanding our services to meet the clients’ needs. To accomplish these expansions, we are always looking for talented individuals to add to our great employee base. We continue to train our staff so that they can grow professionally as Nova grows. |
“We are a client-driven company and we are always keeping our focus on the client. Our goal is to listen to their needs and then develop services to meet those needs.” - Steve Cummings
Nova Consulting Group
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Steve
Cummings