Today’s Good News: The Greening Of Commercial Real Estate
The Progressive Investor newsletter says that two-thirds of REIT’s across the country are either actively pursuing energy efficiency and green building upgrades or planning to do so.
Why is this such good news? Well, buildings produce 21% of the world’s CO2 emissions (38% in the US), more than transportation or manufacturing. About 15 million new buildings will be added by 2015. Commercial buildings, the largest polluter, are expected to grow emissions 1.8% a year through 2030.
A recent United Nations study concluded that green buildings can do more to fight global warming than all curbs on greenhouse gases agreed under the Kyoto Protocol, while saving billions of dollars.
The trend is being driven by:
- Developers and building owners feel the crunch of high energy and water costs, which constitute 28% of operating costs for downtown office properties, and 30.4% for suburban properties. They see the quick payback and cost savings that energy efficiency and other green building upgrades offer.
- Increasingly, clients and tenants show a preference for green buildings. The combination of reduced operating costs and more satisfied occupants translates into 3.5% higher occupancy rates, 3% higher rents, and a 7.5% increase in building value, says the McGraw-Hill 2006 SmartMarket Report.
- Green building is increasingly being mandated. Nine states and 40+ municipalities have passed legislation mandating LEED-certified buildings
(LEED is the Leadership in Energy and Environmental Design (LEED) Green Building Rating System, a nationally accepted benchmark for the design, construction, and operation of high performance green buildings.)
Check out Sustainable Business here for lots more good news along these lines.
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