06 Sep Green Real Estate Goes Mainstream
Many owners have made a commitment to reducing their carbon footprint, whether it’s through local source or conservation. But Bank of America’s intent to build a 52-story “eco-building” in Times Square strongly suggests that green building is now seen by big business as more than just image-friendly – it’s fiscally friendly, too.
The U.S. Green Building Council estimates that 10% of all new commercial construction received their Leadership in Energy and Environmental Design (LEED) certification in 2010. A recent study of commercial property sales identified a commitment to green “redevelopment” by developers like Hines and the Durst Organization, as well as a contingent of real estate investment trusts (REITs). These groups have purchased partially-vacant or distressed commercial properties and renovated them to be green. The primary intent is to help the environment through lower emissions, and reduced usage of resources, but there is a real hard-money difference for such a venture. On average, the building owner can increase rents by about 3%; likewise, an increase of about 8% in a post-renovation appraisal isn’t too shabby, either!
At their eco-conscious corporate headquarters in Cambridge, MA., biotech firm Genzyme sees a 42% reduction in energy costs and a 34% reduction in water consumption over a “typical” commercial space. With green initiatives on the table at companies like IBM, Chase, and Johnson Controls, the trend is catching on in business.
As green goes mainstream, consumers will see the availability of more environmentally-friendly options. Likewise, developers will enjoy an improvement in their image – and their bottom line.