One of the ironies of the current real estate market is that while lenders, investors, and developers have become more risk averse due to the shaky economy one formerly high-risk type of development, brownfield redevelopment in urban areas, has become a sort of industry darling and may be one of the easier types of development to get done in today's environment. In my opinion a perfect storm of macro-economic and social trends are making brownfield redevelopment highly attractive right now. These trends include:
- Higher gasoline costs - dense infill redevelopment looks better and better as gas passes $4.00 per gallon
- The green movement - more individuals, companies, and municipalities are focused on creating green and sustainable environments in which to live and work.
- A re-urbanizing workforce - today's workforce is showing an increasing preference for urban living and many employers and retailers are re-urbanizing as well to be close to their employees or patrons.
- Relatively inexpensive infill land - government incentives, reusable existing structures, in-place infrastructure, and a limited number of qualified buyers make brownfield sites price-competitive with greenfield land.
- Increasing comfort with environmental risks - developers, lenders, and investors have all become more comfortable with the ins-and-outs of environmental risks and rehabilitation.
Llenrock Group
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