Greenfield & Brownfield Industrial Developments
While greenfield industrial developments may be far more common and less costly, brownfield options also offer significant investment opportunity.
Greenfield & Brownfield Industrial Developments
One of the most important decisions an industrial developer can make is where to build a property. There are many tenants seeking expansive space in suburban settings, but so too is there significant demand for more centrally located, last-mile facilities in major metropolitan areas.
This article examines the differences between two types of developments: greenfield and brownfield.
The Differences Between Greenfield & Brownfield
Greenfield and brownfield developments get their names from a project site's location and previous use.
Greenfield industrial developments are what they sound like: properties constructed on undeveloped land. A distribution center constructed on former farmland is a prime example. This is the most common type of development in the sector today, given tenant demands for larger, more expansive facilities. Open farmland near an interstate can be an ideal site for such a project.
Brownfield industrial developments are projects on a previously developed site. These are most common within urban areas, where a developer replaces a dated asset with something new. This project type is typically more expensive. That said, new industrial assets within a dense urban area can often command far higher rents.
Greenfield Development Advantages & Disadvantages
Pros
Few space constraints
Rapid development timelines
Less expensive
Infrastructure may need to be developed
Far from population centers
Central locations for last-mile facilities
Highly developed infrastructure
Financial incentives may apply
Land may require expensive remediation
Longer development timelines if demolition required
Higher land costs
What is the difference between greenfield and brownfield industrial developments?
Greenfield developments are projects that will occupy a space that has not been developed, such as the construction of an industrial park in distant, predominantly agricultural exurbs of a major metropolitan area. Brownfield developments are projects that are built on land that has been previously developed, such as a multifamily property rising on a previously utilized parcel.
Greenfield developments have the advantage of being in more rural areas, while brownfield developments are generally in more central locations and have existing infrastructure and transportation links in place. Brownfield developments may also have larger potential financial incentives available.
What are the advantages and disadvantages of greenfield industrial developments?
The advantages of greenfield industrial developments include flexibility in design, lower costs, and faster development timelines.
The disadvantages of greenfield industrial developments include often being far from urban centers where demand is highest, infrastructure may not be in place, and negative environmental impacts.
What are the advantages and disadvantages of brownfield industrial developments?
The advantages of brownfield industrial developments include generally more central locations, existing infrastructure and transportation links, and larger potential financial incentives. The disadvantages include potentially high land remediation costs, longer development timelines, and land constraints (including zoning).
What are the environmental considerations for greenfield and brownfield industrial developments?
Greenfield industrial developments are those that are built on undeveloped land, while brownfield developments are those that are built on land that has been previously developed. Environmental considerations for greenfield developments include the potential for disruption of natural habitats, the potential for soil and water contamination, and the potential for air pollution. Environmental considerations for brownfield developments include the potential for soil and water contamination, the potential for air pollution, and the potential for hazardous materials contamination.
For both greenfield and brownfield developments, it is important to consider the potential environmental impacts of the development and to take steps to mitigate those impacts. This may include conducting environmental assessments, implementing pollution prevention measures, and developing plans to manage stormwater runoff.
What are the financial considerations for greenfield and brownfield industrial developments?
When considering a greenfield industrial development, the financial considerations include lower costs and faster development timelines. This is due to the flexibility in design and the lack of existing infrastructure or transportation links.
When considering a brownfield industrial development, the financial considerations include generally more central locations, existing infrastructure and transportation links, and larger potential financial incentives.
What are the legal considerations for greenfield and brownfield industrial developments?
Legal considerations for greenfield and brownfield industrial developments vary depending on the location and type of development. For greenfield developments, legal considerations may include zoning laws, environmental regulations, and land use restrictions. For brownfield developments, legal considerations may include environmental regulations, land use restrictions, and potential liability for hazardous materials.
For greenfield developments, it is important to consider the zoning laws of the area, as they may limit the type of development that can take place. Additionally, environmental regulations must be taken into account, as they may limit the type of development that can take place. Finally, land use restrictions may also be in place, which may limit the type of development that can take place.
For brownfield developments, it is important to consider environmental regulations, as they may limit the type of development that can take place. Additionally, land use restrictions may also be in place, which may limit the type of development that can take place. Finally, potential liability for hazardous materials must also be taken into account, as this may limit the type of development that can take place.
For more information on the legal considerations for greenfield and brownfield industrial developments, please visit this page.