NEW YORK CITY-The ongoing global economic turmoil has meant less of an appetite for risk on behalf of buyers and investors of commercial real estate. With few exceptions, attention has been focused on safe bets—trophy assets in key markets. According to data from EDR Insight, the analytical research arm of Environmental Data Resources which tracks tolerance for environmental risks, there is also a measurable decrease in the risk buyers and underwriters of commercial property deals are willing to take on.

Dianne Crocker, principal analyst at EDR Insight, says that several factors are behind the more in-depth look that’s being taken into potential problems like groundwater and soil contamination and vapor intrusion.

“I think we’re in the midst of the biggest transfer of assets that any of us has ever seen in our lifetime and we’re really moving into the peak period of distressed assets, whether you’re talking about banks unloading huge portfolios of troubled loans or owners that are just being forced to sell,” Crocker tells GlobeSt.com. “You have to think of these distressed deals happening in an environment where commercial property prices aren’t rising like they were in 2005 or 2006. That means every dollar is critical to buyers.”

Without any assurance that the price on a piece of property will rise in the near future, buyers and the banks underwriting deals are trying to make sure that they’re not buying or financing a money pit. They’re no longer simply checking the environmental due diligence box and moving on. Crocker says that they’re “looking under rocks and it’s not always pretty,” as issues that would have been overlooked a few years ago can now put the brakes on a deal, kill it altogether or provide costly legal headaches down the road.

EDR case studies bear this out. For example, a day care center built on the site of a former thermometer factory in New Jersey later led to lawsuits filed against the property owner when children and workers became ill.

Further complicating matters is the overall economic picture, Crocker says. Factors like the European debt crisis, the downgrading of US debt and an unemployment rate that’s hovered around 9% aren’t encouraging risks of any kind.

“Right now there’s so much uncertainty than there was 6 months ago and that translates into a lower appetite for risk, including environmental,” Crocker says. “There’s a much different mentality in the market now than where it was in the first part of the year.”

Click here for a look at results from EDR Insight's 3Q11 survey on risk tolerance for environmental due diligence.