Many companies and municipalities have large real estate holdings. When redevelopment becomes a focus, they often don’t understand how to set priorities for deciding which properties to redevelop first.

Understand Your Portfolio
The first step for a municipality is to create a master brownfield inventory, and USEPA or state grants are frequently used to create them. The control of a brownfield listing is somewhat controversial. Some cities feel that publishing one puts a negative stigma on a property; others publish in an attempt to present potential properties to developers. Whichever approach takes precedence, simple tools are available to better utilize your portfolio.

Spreadsheets can help develop a broad list that details appropriate redevelopment parameters which, minimally, should include location, Parcel Identification Number (PIN), size, ownership, tax history, and regulatory status. And Web sites allow potential developers to view available properties.

Corporations have different issues. Frequently, holdings include properties acquired through acquisitions and mergers, leaving many companies without a complete list of properties or the information necessary to evaluate the potential for redevelopment. Key elements include property size, assessed land value, value of improvements, environmental issues, regulatory status, and taxes.

A company can create a master property index by gathering information from multiple sources that range from real estate files, remediation department files, mergers and acquisitions files, and tax files.

Identify Types of Opportunities
Redevelopment opportunities for municipalities often include identification of properties that fit into the city’s master plan or community development plans. Often, brownfield properties can be linked to targeted business or redevelopment districts (e.g., tax increment finance districts), recreation uses (e.g., parks, bike trails), or large single tracts (planned use developments).

Corporations, on the other hand, look for opportunities to reduce expenditures, find value in underutilized property, or reduce environmental liability. Some considerations include footprint reduction (redeveloping a portion of an active facility that is no longer needed); selling excess properties in groups (bundling); or naturalizing a remediated site to obtain green credits.

Rank Properties
Redevelopment objectives should be clear when ranking properties. Municipalities and corporations have different objectives. Municipalities tend to focus on maximizing redevelopment within resource allocation restraints. High priority properties will likely focus on maximizing beneficial community results that can be measured, such as enhanced tax base, jobs and new community facilities.

Corporations tend to focus on maximizing redevelopment value while minimizing risk. Real estate property value is one of the highest ranking factors for a corporate portfolio. The value of the properties can vary greatly, ranging in orders of magnitude from a few thousand dollars an acre in rural areas, to millions of dollars an acre in major downtown areas. Checking “comps” (i.e., comparable values for similar properties in the same town) is a valuable technical tool to identify the relative value of properties.

A key driver for prioritization is the ease of initiating redevelopment. A property that has liens and other property encumbrances falls very low on a developer’s list of priority sites, no matter how attractive the opportunity.

Setting objectives and understanding what planners, purchasers or developers are looking for is perhaps the best way to start prioritizing your properties for redevelopment.

Ken Kastman is a vice president and senior principal engineer at URS Corporation in Chicago.