The industrial real estate sector has been plagued by a shortage of new inventory thanks to a confluence of events that includes the COVID-19 pandemic, building material supply disruptions, labor shortages, a continuing run on e-commerce fulfillment centers, and much more.
As a result, industrial stakeholders have gotten creative in the face of adversity by converting commercial properties, building vertical warehouses, and spreading inventory across numerous micro-fulfillment centers.
Despite the innovation happening over the past two years, many industry stakeholders have overlooked blighted industrial properties as a viable pipeline for new industrial inventory.
For those who may be unfamiliar, a property becomes blighted after having fallen into disuse and disrepair. These buildings often become home to pests, pollution, and crime, which brings down property values in surrounding neighborhoods.
In the industrial world, blighted facilities spring up when companies go out of business and leave their factories and warehouses unattended and unsold.
From empty lots to crumbling former factories, many major U.S. cities have no shortage of blighted industrial properties that require attention. However, Phoenix Investors has had significant success remediating blighted properties, with examples including:
At Phoenix Investors, remediating blighted properties is one of our core methods for developing new inventory and helping communities.
Blighted properties present numerous challenges for developers. Builders must address pest problems, soil and water pollution, criminal activity, and more. In addition, the buildings themselves are often completely unusable, and the blighted facility must get demolished so the developer can rebuild from scratch.
Five years ago, all that effort probably wouldn’t seem worth it. But when facing overwhelming industrial demand and a shortage of viable industrial land, these decaying facilities present an opportunity to create new industrial inventory while giving back to communities and revitalizing neighborhoods.
Some of the advantages of remediating blighted industrial properties include:
Though redeveloping blighted facilities is certainly not without its challenges, some would say the same as repurposing old shopping malls or office buildings for industrial use. In addition, blighted industrial real estate presents a significant opportunity in urban markets where industrial space has become near-impossible to find.
ABOUT PHOENIX INVESTORS
Founded by Frank P. Crivello in 1994, Phoenix Investors and its affiliates (collectively “Phoenix”) are a leader in the acquisition, development, renovation, and repositioning of industrial facilities throughout the United States. Utilizing a disciplined investment approach and successful partnerships with institutional capital sources, corporations, and public stakeholders, Phoenix has developed a proven track record of generating superior risk-adjusted returns, while providing cost-efficient lease rates for its growing portfolio of national tenants. Its efforts inspire and drive the transformation and reinvigoration of the economic engines in the communities it serves. Phoenix continues to be defined by thoughtful relationships, sophisticated investment tools, cost-efficient solutions, and a reputation for success.