August 24, 2022

Not in My Backyard: Warehouse Edition

Not in My Backyard: Warehouse Edition

It’s no secret that warehouses may produce excess noise, generate vehicle traffic, and otherwise inconvenience occupants of surrounding residential areas. However, a warehouse boom continues to grip the country as retailers seek to meet ever-growing demands for e-commerce fulfillment. In the face of excessive demand, developers and other industrial real estate stakeholders have been forced to seek properties outside traditional industrial areas.

As warehouses spring up nearer to residential properties, those residents have begun to push back with a battle cry that’s hardly new to commercial real estate professionals: “Not in my backyard!” Not in my backyard (NIMBY) movements are an age-old challenge faced by commercial real estate stakeholders ranging from retailers to office buildings to manufacturers. Unfortunately for warehouse developers—who are desperate to deliver new inventory—NIMBY pushback has created an additional challenge for siting new facilities in an already-complex market.

NIMBY for Warehouses: What’s the Problem?

Reasons for NIMBY efforts vary widely between residents, making it difficult to make concessions that will please everyone. Common fears associated with NIMBY appeals include:

  • Excess traffic
  • Noise and light pollution
  • Environmental pollution
  • Building an unsightly facility
  • Lowering surrounding residential property values
  • Attracting other similar facilities to the area

Given that NIMBY objections typically get filed with town or city officials in advance of construction, developers have the opportunity to address many of these concerns before breaking ground. Doing this may help to alleviate the concerns of the local populace and even gain support from some residents.

How to Address NIMBY Concerns

Some real estate developers will refer to NIMBY movements as “Citizens Against Virtually Everything” (CAVE) and refer to the opposition as CAVE people. It’s worth noting upfront that these attitudes aren’t helpful and may result in additional derision your organization must overcome. NIMBY movements generally rise out of concern for the community, making it important for warehouse stakeholders to treat those concerns as valid.

Consider some or all of the following practices to help you minimize pushback from the local population:

  • Make sure your design is aesthetically pleasing. First and foremost, nobody wants to look out their front window and stare at a giant warehouse. This gut reaction is the basis of many NIMBY efforts. Where possible, work with the architect to develop a design that enriches the aesthetic value of the surrounding area instead of creating an eyesore.
  • Build green from the start. If you implement sustainable elements into your warehouse from the jump, you can assuage concerns about your facility’s environmental impact. Incorporating eco-friendly features such as solar panels, electric equipment, green spaces, green roofing, good insulation, smart HVAC systems, and other green features into your warehouse is far easier on a new project than on an existing facility.
  • Use local labor as much as possible. If you bring in contractors from halfway across the state or country to construct your facility, locals may feel you don’t care about their needs. Make every effort to use local suppliers, contractors, and subcontractors to ensure you provide maximum benefit to the community you’re building in.
  • Commit to minimizing the operational impact on the surrounding area. NIMBY complainants often fear how the facility will change their day-to-day lives. Consider pushing shipping and receiving windows to off-peak hours to avoid interfering with commuters. You could also commit to using only electric equipment to lower facility noise.
  • Make commitments to give back to the community. There are many ways to signal to residents that you have a vested interest in the community and the people who live in it. Some examples may include sponsoring local teams; donating to local non-profits, charities, and schools; or investing in partnerships with area businesses. Prove that you can raise the quality of life in the area, and you’ll have a better chance of overcoming opposition to your warehouse.

The items listed here only represent some of the available options for winning over a NIMBY movement. As a best practice, hold public forums to ensure you hear your potential neighbors’ concerns as soon as possible. Once you understand their fears, you will find it easier to address them with your design and operation.

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.

David Marks is the President and CEO of Phoenix Investors, a national real estate firm specializing in industrial real estate based in Milwaukee, Wisconsin, as well as trustee, key officer, director, and manager for all its affiliated entities, a role that he has held since 1994. Mr. Marks oversees all investments, with responsibilities that begin pre-acquisition and extend through ownership and disposition. Phoenix Investors: Established in 1994, Phoenix Investors is a private real estate company with over twenty-five years of experience in successfully acquiring, managing, and operating commercial real estate from coast to coast. Phoenix Investors, a limited liability company: Frank P. Crivello, David Marks, Anthony Crivello.

Frank P. Crivello is a Milwaukee-based developer and Chairman & Founder of Phoenix Investors.

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