By Kyle Hayes and Gordon Steadman | Terricon
Terracon had a productive year, with environmental services lines leading the trend.
We credit our success to commercial developers, land speculators, and end users expanding their portfolios in North Florida.
The limited availability of raw land in popular market locations posed a challenge.
Trending development includes logistics and distribution, multi-family residential and waterfront adaptive reuse. With the redevelopment of these sites, environmental concerns can often create challenges.
There are a multitude of environmental conditions that can impact the balance sheets for the success of redevelopment projects.
Over the years, it has become common for our clients to exercise due diligence and back out of transactions at the slightest suspicion of environmental concerns. The current market does not offer this luxury to our clients and seems to have shifted the pendulum of risk tolerance.
We notice that more and more customers anticipate the need for an environmental assessment or cleaning and accept it without hesitation.
Although the availability of desirable land or plots is limited and creates a need to redevelop plots with extensive historical use and environmental assessment, we have also noted that developers and lenders are more savvy on environmental issues.
We have seen an influx of large, affluent developers who are used to the complications and costs associated with environmental issues, based on their experience in other markets.
In addition, lenders have been made aware of environmental regulatory closure options and have become more receptive to accepting risk-based site closure options that provide for contaminated media to remain on sites with controls in place to protect the public and the surrounding environment.
These market trends have also highlighted a significant increase in our commercial real estate clients prospecting contaminated sites and working with us to obtain tax incentives for environmental clean-up.
The density of development has also had a significant impact on our clients’ need to consider the increased costs associated with permitting and mitigating wetlands, surveying and relocating endangered species. and endangered species, namely the gopher tortoise, and the integration of cultural resource assessments.
Entering the second half of the year, Terracon continues to see multiple opportunities across all of our service lines in Northeast Florida. Like all businesses today, we are watching the economy closely and will react to the market accordingly.
Overall, we see the movement on new developments promising.
Kyle Hayes is senior partner at Terracon and director of the environmental department. Client Development Manager Gordon Steadman is a 2022 Managing Director of the Northeast Florida Chapter of the NAIOP Commercial Real Estate Development Association.
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