Green is the New Black
Operating large buildings can be expensive. Lighting, heating, cooling and water usage in an office building are some of the major expenses of an investment. Save on these expenses and you not only help the environment, but you also increase the value of your investment in more than one way. Being green can help a building stay in the black.
Sustainability is the latest buzzword when it comes to development and construction. Sustainability is based on the idea that everything we depend upon is directly or indirectly obtained from our natural environment.
Creating and maintaining the balance for our present and future needs in a environment-friendly, socially-aware and economically-attainable method is at the essence of sustainability.
A movement is underway in commercial real estate for building and managing “green” sustainable buildings. According to CBRE there are 8,405 Energy Star certified buildings and 5,470 LEED certified buildings throughout the US.
Energy Star and LEED (Leadership in Energy and Environmental Design) are the two major certifying agencies for commercial real estate. These agencies develop the standards a building must meet to be considered green. There are several levels of the rating systems each with their own incentives.
One of the big factors for moving in the direction of green buildings is to lower operating costs, which in-turn increases the value of the investment.
The return on your investment is a major consideration for developers and property owners. To be certified a developer or property owner has several standards or factors, which must be met. They are not alone in their endeavor though as there are many tools and programs available on a governmental level as well as a vendor-driven level. Financially, the developer and property owner have access to rebates, tax credits, grants, low interest loans and other incentives.
There is a new industry that has been created, which will only continue to grow of providers, consultants, certification specialists, product vendors, builders and analysts. Those with accreditations are in high demand.
Many Fortune 500 companies are attracted to green buildings as well in order to meet their internal environmental policies according to CBRE. These are the types of tenants desired and in high demand, therefore rent can oftentimes come at a premium.
However, you cannot just install a few solar panels and expect to reap the benefits of a certification. There are five factors involved with a LEED certified building: sustainable site design; water conservation and quality; energy and environment; indoor environmental quality; conservation of materials and resources.
A building owner could also reap the benefits of retrofitting some of the systems in his building and still impact his bottom line without being certified. A building owner could replace the lighting in his building or the HVAC (heating-ventilation-air conditioning) systems with minimal out-of-pocket and the use of rebates. Some of these property owners are recouping their costs after less than a year in operation with many years after that benefiting in the reduction of their operating expenses.
Photo Credit: “Downtown” courtesy of New Old Stock, free of known copyright restrictions