Business Management Executive Q&A
Nov 16, 2007
By: Amanda Marsh, Associate Editor
Both brownfield disposition and investment have become increasingly popular in commercial real estate, due in large part to the increased value being placed on redeveloped properties and more intense focus on corporate social responsibility. CPN associate editor Amanda Marsh spoke with Environmental Data Resources CEO Rob Barber on some of the factors shaping the brownfield market.
CPN: What are the hottest areas for brownfield investment or development?
Barber: The most desirable and fastest to be considered for redevelopment are brownfields centered in urban areas and former manufacturing towns. Redevelopment is on the rise at these environmentally contaminated properties, and across the nation, these distressed properties are being given a second lease on life. There are many, many economic and socially responsible opportunities to consider developing these sites. We have been providing critical environmental data to an unprecedented number of corporations and municipalities that are redeveloping and divesting their brownfields sites. These companies appear to be prospering through identifying and proactively managing these once ignored, but now highly valuable, properties.
CPN: With both sellers and buyers having better access to environmental data and more knowledgeable consultants, do you foresee an increase in brownfield transactions? Will brownfields eventually become a "normalized" transaction?
Barber: Our market research suggests that there will continue to be an increase in brownfield transactions. Although the appetite for brownfield transactions will continue to rise, I do not see the brownfield transaction ever being "normalized." The many parties involved in a transaction need to work through complex liability issues. Traditionally, these issues change based on the geographic region, severity of contamination, regulations, etc. However, most of these sites are located in areas with high real estate values and are close to transportation outlets, so they are getting this second look as valuable properties.
CPN: What sorts of brownfield incentives are available?
Barber: Federal and state agencies are making it more attractive for developers to consider these once forgotten properties. There are many tax incentives and grants to facilitate brownfield redevelopment, which is making it a terrific time to locate these properties and find out the level of contamination. In addition, they are posting brownfield inventories and creating awareness through educational outlets such as regional and national conferences. The federal Environmental Protection Agency's Brownfield Incentive Program, for example, allows environmental cleanup costs at eligible properties to be fully deductible in the year incurred, rather than capitalized and spread over a period of years.
CPN: How are brownfield transactions fitting overall into the current green/sustainability movement?
Barber: Corporations and governments are not only looking at their current environmental footprint such as what energy they use, but what also is the historical environmental legacy of their company or the companies they may merge with or acquire. We have all seen the push for businesses to identify their own environmental footprint, and with that comes being a more mindful community steward and identifying the contaminated brownfield and conducting remediation and redevelopment at these sites. It is not only developers becoming more conscious of their environmental impact, but municipalities have also followed suit with policies to stimulate and ensure more sustainable development in their regions. Corporations and the community are benefiting as contaminated properties get cleaned up in a sustainable manner. This increased redevelopment of brownfields is going to benefit us all through more valuable property and healthier communities.
CPN: What has EDR been doing to further brownfield knowledge and access to data?
Barber: EDR works with individuals and governments not only to identify brownfields but (to) understand the complexity surrounding their development. From our Due Diligence at Dawn series of lectures, which offers educational venues across the nation for environmental professionals, to the decades of work EDR has undertaken to identify the available historical environmental data across the U.S., we are constantly raising the level of awareness around brownfields. The environmental consultants, municipalities, attorneys and developers involved in brownfield redevelopment are increasingly using EDR's comprehensive data solutions, including the environmental records search tool EDR OnDemand, which provides web-based access to EDR's database of 23 million environmental records. As this increased demand for more and faster information develops, EDR also grows to help those interested in brownfield development inventory, plan for, assess and redevelop sites.
By: Amanda Marsh, Associate Editor
Both brownfield disposition and investment have become increasingly popular in commercial real estate, due in large part to the increased value being placed on redeveloped properties and more intense focus on corporate social responsibility. CPN associate editor Amanda Marsh spoke with Environmental Data Resources CEO Rob Barber on some of the factors shaping the brownfield market.
CPN: What are the hottest areas for brownfield investment or development?
Barber: The most desirable and fastest to be considered for redevelopment are brownfields centered in urban areas and former manufacturing towns. Redevelopment is on the rise at these environmentally contaminated properties, and across the nation, these distressed properties are being given a second lease on life. There are many, many economic and socially responsible opportunities to consider developing these sites. We have been providing critical environmental data to an unprecedented number of corporations and municipalities that are redeveloping and divesting their brownfields sites. These companies appear to be prospering through identifying and proactively managing these once ignored, but now highly valuable, properties.
CPN: With both sellers and buyers having better access to environmental data and more knowledgeable consultants, do you foresee an increase in brownfield transactions? Will brownfields eventually become a "normalized" transaction?
Barber: Our market research suggests that there will continue to be an increase in brownfield transactions. Although the appetite for brownfield transactions will continue to rise, I do not see the brownfield transaction ever being "normalized." The many parties involved in a transaction need to work through complex liability issues. Traditionally, these issues change based on the geographic region, severity of contamination, regulations, etc. However, most of these sites are located in areas with high real estate values and are close to transportation outlets, so they are getting this second look as valuable properties.
CPN: What sorts of brownfield incentives are available?
Barber: Federal and state agencies are making it more attractive for developers to consider these once forgotten properties. There are many tax incentives and grants to facilitate brownfield redevelopment, which is making it a terrific time to locate these properties and find out the level of contamination. In addition, they are posting brownfield inventories and creating awareness through educational outlets such as regional and national conferences. The federal Environmental Protection Agency's Brownfield Incentive Program, for example, allows environmental cleanup costs at eligible properties to be fully deductible in the year incurred, rather than capitalized and spread over a period of years.
CPN: How are brownfield transactions fitting overall into the current green/sustainability movement?
Barber: Corporations and governments are not only looking at their current environmental footprint such as what energy they use, but what also is the historical environmental legacy of their company or the companies they may merge with or acquire. We have all seen the push for businesses to identify their own environmental footprint, and with that comes being a more mindful community steward and identifying the contaminated brownfield and conducting remediation and redevelopment at these sites. It is not only developers becoming more conscious of their environmental impact, but municipalities have also followed suit with policies to stimulate and ensure more sustainable development in their regions. Corporations and the community are benefiting as contaminated properties get cleaned up in a sustainable manner. This increased redevelopment of brownfields is going to benefit us all through more valuable property and healthier communities.
CPN: What has EDR been doing to further brownfield knowledge and access to data?
Barber: EDR works with individuals and governments not only to identify brownfields but (to) understand the complexity surrounding their development. From our Due Diligence at Dawn series of lectures, which offers educational venues across the nation for environmental professionals, to the decades of work EDR has undertaken to identify the available historical environmental data across the U.S., we are constantly raising the level of awareness around brownfields. The environmental consultants, municipalities, attorneys and developers involved in brownfield redevelopment are increasingly using EDR's comprehensive data solutions, including the environmental records search tool EDR OnDemand, which provides web-based access to EDR's database of 23 million environmental records. As this increased demand for more and faster information develops, EDR also grows to help those interested in brownfield development inventory, plan for, assess and redevelop sites.
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