Commercial real estate is a popular industry for investment, and the impressive rate of return isn’t the only reason. The industry consistently creates new and lucrative opportunities for investment, which is a core reason for its continued popularity. Agricultural trends are the latest reason why commercial real estate investors have something new to add to their portfolios.

Agriculture has not been one of the most sought-after commercial real estate investments, which is why our statement may throw you off guard. However, the agricultural industry has evolved, and recent changes look promising.

This blog will address the changes in the agricultural industry and explain how that is relevant to commercial real estate.

What is Happening in the Agricultural Industry?

The agricultural industry has always been at the center of innovation. Researchers are tasked with finding new ways to maximize output to keep up with growing population needs. However, with the climate crisis introducing new challenges, there has been a shift in trends.

Following are the key directions in which the agricultural industry is moving:

1. The Focus on Sustainability

Several environmentalists have pointed out that the current agricultural practices are harmful to the environment. The discussion has led researchers and farmers to explore Regenerative Farming, a sustainable approach to cultivating food crops.

2. Increasing Demand for Urban Farming

There have been increasing concerns about food waste, prompting a demand for urban farming to reduce spoilage due to logistics. Urban farming models have proposed introducing community gardens, rooftop gardens, and indoor gardens to increase urban crop production.

3. Vertical Farming

Biotechnology advancements have made it possible to grow crops in research facilities by controlling temperature, light exposure, humidity, etc. The goal is to increase crop production per unit of land to reduce the need to convert natural fields into farmlands.

How is it Relevant to Commercial Real Estate?

The agricultural trends mentioned above have significantly impacted commercial real estate.

1. Specialized Commercial Real Estate

The need for urban farming and vertical farming has created a demand for specialized commercial real estate that can accommodate the conditions necessary to set them up. Therefore, investing in such real estate can lead to higher returns.

2. Potential Subsidies for Sustainable Farming

Governments are encouraging farming businesses and farmers to start adopting regenerative farming and similar sustainable techniques. The current focus is experimental, but the government may provide subsidies to businesses exploring sustainable farming.

Therefore, investing in agricultural, commercial real estate will likely have higher returns for a change.

3. Higher Demand for Green Commercial Real Estate

Lastly, the focus on urban farming has also increased the demand for green commercial real estate. Rooftop gardens are especially in demand because they are considered environmentally friendly and sustainable. Therefore, investing in them right now will help you benefit from the rising value.

Final Thoughts

Overall, we need to pay attention to recent agricultural trends because they are behind the increase in demand for certain commercial real estate properties. Studying the trends will allow you to include such properties in your portfolio, increasing profitability.

Please get in touch with our team to invest in commercial real estate. CHRE has been working in the industry for years, and we can help you find the most suitable investments.