By the year 2050, the worldwide population is expected to reach 9.7 billion. This means that food production will need to increase by a striking 70% within the next thirty years in order keep up with consumption.
Luckily, with new innovative technology, the agricultural industry has begun to adapt to the idea of indoor farming. Acceptance is gaining traction as the advantages are slowly starting to be realized. Advancements within the industry have increasingly allowed fresh produce to be grown in densely populated areas without the negative impacts of unpredictable environmental variables.
But where are these indoor farming facilities located? As we all know, the pandemic has created unprecedented times throughout almost every market; this trend has affected positively and negatively in the commercial real estate industry. According to our Q1 2022 statistics, office vacancy rates were at 15%, with a steady negative net absorption rate. Although these numbers look frightening, at first glance, they provide a window of opportunity for the agricultural industry to transcend traditional farming methods. Since the onset of the pandemic, many employees have transitioned to working from home, and a significant number of employers have reduced their office footprint. Because of this, filling office space has become a major challenge, especially within urban cores.
Thankfully, this is where indoor farming comes to play. One of the most apparent benefits of indoor farming is its utilization of space. There are a couple of different strategic ways to go about indoor farming, two examples include vertical farming and hydroponic farming. Vertical farming is often performed in outdated industrial or office buildings, taking advantage of the space through vertically stacked layers. This offers an increase in yields over traditional outdoor farming methods by a multiple of forty. Then there is hydroponic farming which facilitates grow crops in a nutrient solution rather than soil. By doing so, the nutrients surround the roots of the plants entirely, making it much easier for them to absorb everything needed for strong yields. This process allows the plants to grow more rapidly and abundantly than if they were planted in soil.
While indoor agriculture provides for better use of space, significant energy consumption is the largest drawback. This is due to the necessary infrastructure to run the facilities such as: various lights, sensors, cameras, and water pumps. Despite unusual infrastructure needs, the benefits outweigh the drawbacks. The ability to control the environment year-round allows many negative variables to be easily avoided, e.g., droughts, storms, insect infestations, etc. It also allows farmers to produce crops that were once unattainable in certain regions due to topography or climate. Lastly, having the ability to grow produce in urban areas allows for fresher food for the consumers by cutting down the cost and time it takes to transit to local grocers.
Indoor farming has a lot to offer to the commercial real estate industry and consumers alike. Whether through vertical or hydroponic farming, there will always be an opportunity to retrofit space within the market, contribute to the overwhelming agricultural needs and help make our world a fresher place!