Greyfield land

Greyfield land is a term used in the United States and Canada to describe economically obsolescent, outdated, failing, moribund and/or underutilized real estate assets or land. The term was coined in the early 2000s as a way to describe the sea of empty asphalt that often accompanied these sites. "Greyfield" is a relative neologism when compared to more commonly known terms such as brownfields or greenfields.

The term has historically been applied to formerly viable retail and commercial shopping sites (such as regional malls and strip centers) that suffer from lack of reinvestment and have been "outclassed" by larger, better designed, better anchored malls or shopping sites. This retail-centric application to greyfields may also be referred to as "dead malls" or "ghostboxes" if the anchor or other major tenants have vacated the premises leaving behind empty shells.

Unlike brownfields (which feature actual or preceived levels of environmental contamination), greyfields typically do not require remediation in order to unlock value to an investor. The hidden value, in many cases, is the presence of underlying infrastructure (such as plumbing and sewer, electrical systems, foundations, etc.) that allow a developer to more efficiently improve the site through major or minor capital expenditures that may lead to increased rents and greater value. Other important potential qualities include parking, a central location, etc. may also be leveraged in a well-executed redevelopment of the site. Some greyfields may also be considered favorable to investors because, even though they may be, by definition, outclassed or physically in disrepair, they may have revenue in place through long or short term leases. Greyfields with short term leases may work well for an investor/developer who has a strategy involving intensive real estate asset management. By actively managing the greyfield in a short-term lease environment, rents may be increased after improvements are made.

The greyfields term may also be applied more broadly to urban infill or commercial locations where underutilization or outdated (non-retail) uses hamper an otherwise valuable real estate asset. An example would be a formerly industrial waterfront site that is potentially valuable as a mixed use/residential site as it is being encroached upon by residential sprawl, or other economic or redevelopment pressures. In this example, the revitalization of the greyfield may require zoning changes and/or a public private partnership of some kind to achieve the highest and best use.

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