As the world shifts towards a greener and more sustainable future, the industrial property sector is also adapting to meet changing demands. Developers are now focusing on creating warehouses and logistics facilities that will remain relevant and functional for decades to come. With the rise of electric vehicles (EVs) and increasing concerns about energy consumption and environmental impact, the key to attracting future tenants lies in innovative design and sustainable power solutions.
Traditional offices have experienced a decline in value due to the pandemic-induced shift towards hybrid work models. Similarly, older industrial properties may face a similar fate as changing needs for parking, energy efficiency, and environmental considerations steer potential tenants away from outdated facilities. Mary Land, head of Americas logistics and strategies at CBRE Investment Management, highlighted this concern at a recent event, cautioning clients to be mindful of older logistics properties.
An astounding 82% of all logistics facilities in the U.S. were built before the year 2000, and occupiers’ utilization of these spaces has changed significantly over the years. Modern facilities require stronger floor slabs, higher clear heights, and greater roof load capacity for solar installations. Additionally, the demand for power is rapidly becoming a primary amenity in the logistics environment, overtaking traditional parking space.
One of the most significant changes on the horizon for industrial properties is the electrification of fleets. Federal incentives and regulations are pushing for increased electric vehicle production, with last-mile delivery services particularly poised to benefit from this shift. To accommodate this trend, industrial developers are now centering their designs around electric vehicles, reconfiguring power systems and parking areas to facilitate the charging of vehicle fleets.
The adoption of electric vehicles is steadily increasing, both among consumers and commercial operators. Various federal incentives encourage businesses to embrace EVs, leading to a positive impact on the environment and cost savings in the long run. Some states, like California and New York, have even passed legislation to ban the purchase of gasoline-powered vehicles beyond 2035, signaling the need for developers to anticipate future regulations.
To capitalize on this transformation, developers are urged to prepare for the future by maximizing on-site charging capacities for electric vehicle fleets. With demand for charging stations expected to soar, these facilities could potentially be rented out to other operators, creating a novel business model for industrial outdoor storage locations.
In terms of renewable energy, solar power presents an attractive option for industrial rooftops. However, adoption has been slow, with only 3% of commercial and industrial rooftops in the U.S. currently covered with solar panels. Political action and state mandates could potentially drive faster adoption, making solar energy an essential aspect of sustainable industrial properties.
As the industry moves forward, companies are also becoming more conscious of their emissions and carbon footprints. Green initiatives, driven not just by government incentives but by the increasing demand from future tenants for environmentally sustainable practices (ESG), are becoming crucial factors for developers and owners to consider.
In conclusion, the future of industrial properties lies in embracing sustainable power solutions and accommodating the rise of electric vehicles. Developers, architects, and investors need to stay ahead of the curve, incorporating innovative design and energy-efficient technologies to create properties that will stand the test of time and meet the needs of the environmentally conscious tenants of the future. By doing so, the industrial property sector can remain a resilient and attractive asset class in the face of evolving market demands.