3 Ways Industrial Real Estate Can Promote Sustainable Manufacturing

Here are three things you can do to help your industrial real estate tenants move toward sustainable manufacturing.
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By all accounts, industrial real estate is a hot commodity right now. Massive growth in e-commerce has triggered record-high pre-leasing rates. Some are even calling this the “golden age” of industrial real estate.

But do you know what else is hot right now? The planet. 

Consumers concerned about global climate change are focused more and more on the sustainability practices of the brands they buy. And they’re putting their money where their values are. Commercial property owners and investors are paying attention to this trend, as well. After all, retaining successful, long-term tenants involves providing the best spaces for businesses to successfully meet consumer demands.

If your industrial real estate tenants are focused on sustainable manufacturing, there are several things you can do to help. Best of all for you, these efforts should also increase tenant retention and improve your bottom line, in addition to aiding the planet.

First, What is Sustainable Manufacturing?

According to the EPA:

Sustainable manufacturing is the creation of manufactured products through economically-sound processes that minimize negative environmental impacts while conserving energy and natural resources. Sustainable manufacturing also enhances employee, community, and product safety.

Companies interested in sustainable manufacturing now represent everything from small local manufacturers to prominent global competitors across nearly every sector—even among heavy industries. In addition to the environmental benefits from sustainable business practices, these companies are seeing significant financial returns, as well.

1. Invest in Renewable Energy

Our first tip for helping Earth is to focus on the sun. Solar power and other renewable energies will help reduce your properties’ dependence on fossil fuels. And this can make a big dent in the manufacturing sector. Right now, more than half the electricity in the U.S. is used to power electric motors. These include heating, ventilation, and air-conditioning systems, as well as alternators, compressors, factory machines, and heat pumps. Plus, experts predict about one third of the growth in global energy demand over the next 20 years will come from industrial motors.

If your property is set up to produce electricity without using fossil fuels, that will give it an edge above other options. When manufacturers pair on-site renewable energy with resource-efficient machinery, they can significantly cut their carbon emissions.

2. Provide Opportunities for Smart Tech

Manufacturers are being encouraged to think smart in order to meet their sustainability goals. So, you must invest in the infrastructure that promotes smart technology. That makes high-speed internet a key component for industrial businesses and your properties. According to Forbes

5G networks can now provide the capability and bandwidth that manufacturers need to collect and analyze more data, computing at the edge can enable manufacturing lines to operate autonomously, and processes have improved with the use of IoT, cloud computing, mobile devices, and edge computing on factory floors.

Improved data collection can in turn help companies analyze their supply chains, focus on sourcing material ethically, and operate assets and equipment in an energy-efficient manner. This in turn will allow them to “optimize loads, technician schedules, and service models to increase efficiency and decrease emissions and carbon footprint.” But underpinning all of this is great internet access in their warehouse.

3. Renovate Your Properties

As companies focus on the efficiency of their materials, processes, and employees to reduce waste, so must you focus on the efficiency of your industrial real estate. Industrial buildings have never been one-size-fits-all spaces. There are at least eight industrial building types, divided into three main categories: manufacturing, storage and distribution, and flex space. As the economy continues to reward more efficient, sustainable companies, more companies will begin to demand more specialized, up-to-date spaces. 

Get ahead of the sustainable manufacturing curve by renovating your industrial real estate properties from “general industrial use” to a specific purpose. For instance, re-insulate cold storage facilities or update the wiring and cooling systems at data centers. It may feel like you’re taking a risk by eliminating other uses for your industrial property. But if you’ve done the proper market research to understand what spaces are most in need, it’s a risk that can pay off handsomely.

Ready to Invest in Industrial Real Estate?

NAI Beverly-Hanks continually strives to be the best in the business and provide you with the expertise you need. Contact us today to speak with an NAI Beverly-Hanks agent about investing in the perfect industrial spaces for your commercial investment goals.