Industrial Land Value Optimization

Industrial Land Value Optimization (ILVO) introduces a new framework for conceiving the development of industrial properties – one that enhances their sale and lease value to buyers and tenants. This approach prioritizes sustainable logistics and commercially advantageous market access in the property design process. By identifying each property as a prosperous component of a modern Silk Road*, ILVO expands the horizon for valuing industrial land.

• The Silk Road was an ancient trade route linking China with the West, carrying goods and ideas between the two great civilizations of Rome and China.

In the 21^st century, land use choices must address the full impacts of:

1. the industrial activities at each property,
2. the broader industrial systems in which these activities occur and
3. moving material, goods, and workers to and from each site.

This redefines the concept of “highest and best use.” Currently, the guiding principle in real estate development rivets attention to the site’s maximum coverage, density, height, and income, with little regard for the impact of logistics and supply chain dynamics. However, in many cases, the implications of moving material and people to and from a property are greater than what occurs at the property.

While widely practiced in transit-oriented development, land use planning is rarely applied to freight-oriented development. Yet optimizing a property’s use of highways and rail lines boosts its land value and advances many public-sector objectives.

CAPSI uses multiple commercially available freight databases to illuminate the supply chains that originate, terminate, and pass through a property’s region. This understanding enables land developers and realtors to target buyers or tenants who would most appreciate the property's logistics value.

Knowing the supply chains that a property can serve by using rail, when sensible, boosts the volume of on-site services that can be provided and enables shippers to access a larger marketplace for material supply and product distribution.

Land is no longer so plentiful in North America that we can afford to use it unwisely. In the same way that communities preserve land along scenic lakefronts for low-impact, non-industrial uses, land adjacent to rail lines should be used as much as possible for rail-served industrial activities. We have developed a set of municipal planning innovations to support this smart land use.

What sensible land-use approaches should North America embrace?

• Support developers in sustainable logistics plans
• Preserve land along rail rights-of-way for rail-served development
• Co-locate utility and transportation corridors
• Co-locate passenger and freight rail lines
• Offer property tax benefits to land developers to incentivize rail use  
• Create corridor rail development and operating plans

As the continent embarks on facilitating the rail service expansion envisioned in CAPSI, it must recognize that Industrial Land Value Optimization is critical to attracting private-sector investment capital in sustainable industrial systems.

Solution-Driven Research Guided by IntelliSynthesis

OnTrackNorthAmerica has cultivated an inquiry-based approach to decision-making that empowers researchers to envision innovative projects and produce workable solutions that stakeholders embrace. Researchers can use the following questions as a guide when creating proposals, project designs, action plans, and solutions.

A) Purpose

What issues in the field are we inspired to research, given our areas of interest, concern, and expertise?

1. What is the problem in the field that we want to contribute to solving?
2. Why is this problem significant?

B) Conception

What conception of our project would lead us to generate optimal results?

1. Who would benefit from this solution?
2. What needs to be understood about the problem?
3. Who must be involved to inform our understanding of the problem?
4. How do we measure the implications of the problem and the solution?
5. What dynamics do stakeholders indicate are problematic?
6. What needs to be changed, transformed, or advanced?
7. Who do we want to educate (which stakeholder groups) about our observations, discoveries, and inventions?
8. How do we conduct this education?

C) Design

How do we want to design our work?

1. What can we do to make or assist with these contributions?
2. What tools and methods are available to develop the solution?
3. What new tools and methods should we develop?
4. How will we know we have accomplished our purpose?
5. What factors should we consider when determining the time for completion?
6. What resources can we gather for this project?
7. What partners can we establish for this project?

D) Implementation

How will we execute our plan?

1. What is our game plan?
2. Who is on our team, encompassing academic, government, industry, non-profit, and community partners?
3. What are each team member's responsibilities?

E) Dissemination

How can we best present our work for maximum uptake?

1. Which audiences do we want our work product to reach?
2. What documents, content, spreadsheets, and models would be most helpful?
3. How do we prepare and present this information to partners and stakeholders so that it is accessible to the broadest audience?

Principles:

1. Project conception and design require more input and guidance from industry-experienced individuals.
2. Project execution then needs more direct dialogue with stakeholders in the field.
3. Academic rigor does not preclude tailoring material to be understood by stakeholders.
4. Language and writing need quality editing to communicate effectively with stakeholders.
5. Data, formulae, and methods must be explained to be understandable and usable by primary users in the field.