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July 2016

An increased desire for chef-quality ingredients and the demand for fresh produce, has given rise to urban farms in idle buildings across North American metropolises.


A simple look inside a certain 70,000 square-foot warehouse in the middle of Newark, New Jersey reveals long shelves stacked to the ceiling with fresh herbs and salad greens. This is the world of urban farming.

Over the last few years urban farming has garnered significant interest due to a younger and more health conscious population demanding organic and locally sourced food.  As a result, idle buildings, old warehouses and abandoned factories within cities are being repurposed into urban farms to meet the demand.

The result: a rising industry that has relegated agriculture to city neighbourhoods. The trend is becoming so popular in North America that it earned a spot on PwC’s recent report on Emerging Trends in Real Estate in 2016.

According to the report, some of these neighbourhoods are the “hollowed out” areas of Detroit as well as Camden and Newark, New Jersey. “But there is a surprisingly significant level of activity in places like Brooklyn, Chicago, Philadelphia and Washington D.C., where foodies of all generations abound,” says the report.


According to Andrew Carter, U.S. Regional Manager for the Association of Vertical Farming, consumers have evolved in such a way that they now want to know where their food comes from, and are willing to pay a premium for quality, freshness and flavour. “In many urban areas consumers are stuck with produce shipped from across the globe and are looking for any way to get that freshness they desire. Though urban agriculture can be difficult and expensive, this demand makes these businesses viable.”

Marc Oshima, Co-Founder and Chief Marketing Officer of AeroFarms, one of the leaders and pioneers of urban farming in North America, says there are many forces at work driving growth in urban farming.

“Population growth and the spectre of feeding more than 9 billion people by 2050 is definitely an argument for finding ways to grow in spaces not traditionally used for farming. And environmental forces like soil degradation, water scarcity and contamination – not to mention rising land prices – make indoor agriculture specifically ripe for development and innovation,” he says.

Oshima believes that for consumers it goes much deeper than a simple wish for organic produce. Shoppers want transparency and authenticity, he says, and a connection with their food and the farmers that grow it.

“In fact, multiple studies suggest that shoppers are more likely to choose locally grown produce over organic produce. Since much of the produce in the grocery store travels hundreds, if not thousands of miles – especially in the winter – urban agriculture is a natural answer to consumer concerns,” says Oshima.


For Oshima, idle buildings and warehouses are essential. “In order for any indoor farm to scale, a certain amount of the space is required, which is why warehouses are preferable,” he says.

AeroFarms will open their new global headquarters during this summer which will be the world’s largest indoor vertical farm. The 70,000 square foot building is a former steel mill and is located in the historic ironbound neighbourhood of Newark, New Jersey.

“The farm which sits in an economically troubled, heavily industrial area has welcomed us with open arms. We are hiring locally and also supplying fresh greens to supermarkets, institutions, and restaurants in the NY Metro area, the largest marketplace in the United States,” says Oshima.

AeroFarms’ global headquarters is a USD 30 million investment and has attracted institutional capital as well as public dollars from the city of Newark and the state of New Jersey.

According to Carter of the Association of Vertical Farming, many commercial facilities benefit from being completely indoors; this is why the warehouse model has become more and more popular.  “That said, the needs of the crops tend to require significant alterations to the space, and many businesses consider building completely new structures to house these facilities. There is definitely a need for more warehouse space for food production, but it has to make economic sense on the operator’s side,” says Carter.


According to PwC’s Emerging Trends in Real Estate report, there is surprising scale to a number of operations.

New York City is home to one warehouse operation that produces more than 300 tonnes of vegetables in three hydroponic (process of growing plants in sand, gravel, or liquid, with added nutrients but without soil) operations in Brooklyn and Queens.

“In Chicago, a local business has grown its output to about a million pounds of salad greens and herbs, and contracts with four dozen upscale supermarkets. Detroit’s community and commercial farming operations brought 400,000 pounds of food to market in 2014,” says the report.

In New York, Gotham Greens grows everything from lettuce to bok choy in rooftop greenhouses, including in a 20,000 square foot facility atop a Whole Foods in Brooklyn, while Green Spirit Farms in Michigan operates out of a former plastics moulding factory.

Oshima of AeroFarms says that the company’s whole focus is based on how they can transform agriculture and communities by revitalising abandoned buildings. When they first started, the company operated out of a vacant machine-shop in upstate New York in the Finger Lakes region.

“One of the great things about our growing system is that it is very modular and can be adapted to any space. So we can build a farm almost anywhere, and we get inquiries every day from around the world about bringing a farm to this country and repurposing warehouse space. We have an extensive pipeline of projects and will be building 25 farms over the next 5 years,” says Oshima.

For PwC, what is important for the trend is the repurposing old buildings. “The idea that the end of one productive use of a real estate asset spells the extinction of value and the sun setting of opportunity is an idea whose time is over,” says the report.


Experts believe that vertical farming could move beyond a niche market and become a solution for food insecurity in the U.S., and could even be the future of agriculture, with climate change negatively affecting rural farmland while the global population continues to swell.

“With our proprietary growing system, we have 75 times more productivity per square foot than a field farm and 10 times more than a greenhouse, while using less than 1% of the land required by conventional field growing to produce the same yields,” says Oshima.

According to Carter, urban farms have water savings of up to 90%, better than field grown produce.

“In addition, growing indoors allows for extreme control over the growing environment, which allows for optimum growth parameters, faster growth, and more consistent growth throughout the year, despite climatic issues outdoors,” says Carter.

For investors, vertical farming is a nascent industry, says Carter. “Investing in smart motivated people, interested in addressing food production is never a bad idea. Understanding crop science, produce markets, and the nature of agriculture in general will help investors realise these are longer term investments with a lot of potential to grow.”

While urban farming won’t replace conventional farming anytime in the near future, it will work side-by-side to make fresh produce more accessible to as many city-dwellers as possible, as well as transform the country’s idle buildings to cater for the demand.

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