Subscribers Only Newsletter
Propmodo’s weekly perspective on commercial real estate and things interesting to real estate executives. Curated by Franco Faraudo. View Archive Become a Subscriber
Farming gave birth to civilization. Once people were able to grow enough food to eat in one place they were able to roll up their animal skin sleeves and build cities. But since the industrial revolution, almost all farming was done outside of cities, where land was not in high demand for other things like homes, factories, or shops. Now there are some that are pitching the idea of bringing farming back to cities, this time inside of buildings. Cities around the world are struggling with empty office buildings, so converting them to farms could be a great way to create much needed local food in currently unused spaces. But as quaint as it sounds to live in a city dotted with urban grow houses, it will likely not make sense economically or environmentally, at least in most parts of the world.
First I should start by saying there is nothing sustainable about empty buildings. Finding ways to put empty office to use will always be more efficient than just letting them sit idle. Also, there are lots of reasons to want to grow food inside of our cities. It would eliminate the cost of transportation from the farm, provide resilience from bad growing seasons, and create jobs closer to where people live. New technology has also made indoor farming require much less water than traditional methods, making it appealing to the growing number of places struggling to find enough water to support their population.
But there are also lots of reasons that make these types of farms little more than a neighborhood novelty. Unlike growing crops outdoors, indoor farms use artificial light to grow their products. Also unlike growing outside, indoor farms need to be temperature controlled which requires fans, heaters, and air conditioning. All of this requires energy. Even if the energy used in these farms comes from renewable sources like solar or wind, it is important to remember that those techniques are not carbon-free when you take into consideration the carbon used to build and maintain the renewable energy infrastructure.
A recent study investigated the “hidden footprint” of vertical farming. The research team compared vertical farms, greenhouses, and open-field farming in nine city areas, Reykjavik, Stockholm, Boston, Tokyo, Santiago, Johannesburg, Phoenix, Singapore and the UAE, all with differing land availability, climatic conditions, and population density. They found that the only cities where vertical farming really made sense were places that either lacked fertile land like the UAE or had a very short growing season like Reykjavik, Iceland. Heating vertical farms in Reykjavik also only made sense because the country has an abundance of green energy from sources like geothermal.
A few years ago there was a lot of press about how vertical farming was going to remake our urban landscape. Article after article touted the benefits of vertical farming. But now it is looking like that buzz was mostly a marketing effort. Many of the vertical farming companies that raised a ton of money are now on the brink of bankruptcy including Agricool, Kalera, Appharvest, Fifth Season, Iron Ox, Infarms, Upward Farms, and Aerofarms. That last one, Aerofarms, was started by one of the inventors of the new “aeroponic” technique used by most vertical farming companies today and raised $238 million over ten funding rounds. Even that was not enough.
One of the problems that has led to the downfall of these companies is painfully obvious in hindsight: harvesting. Rather than using a team of people or large tractors to harvest in bulk vertical gardens, people need scissor lifts painstakingly plucking each piece of produce level by level. This bottleneck in production made the harvesting process too slow, costly, and labor intensive for large scale operations.
Don’t get me wrong, I think urban farming is great. I would love to live next to a building where I could buy fresh, local produce. But when it comes to big problems like food instability, carbon emissions, or unused office buildings, vertical farming is only a small part of a possible solution. As technology advances and more low-carbon energy sources come online we could see even more reasons to grow produce in tall buildings. But even then we will have to weigh the pros and cons and think about if crops would be better grown under the sun and buildings would be better used as much needed housing for our human population.
Overheard
Mapped
There are lots of different vertical farming concepts being tested around the world. Here is a map of most of where most of the popular vertical farming companies are setting up shop.
Good reads
Dataless reentry
Amazon is facing backlash from employees after one of its execs admitted that the company had no data to back its new return to office mandates.
Not-so-mini storage
Blackstone Real Estate Income Trust is selling storage company Simply Self Storage to rival Public Storage for $2.2 billion, generating about $600 million in profit for the investment giant.
Signature loans
The FDIC is still looking for a buyer of the now-defunct Signature Bank’s loan portfolio which has been given a price of $18.5 billion.
