Why Going Green Isn’t an Amenity in CRE

going-green-in-cre_teaserGoing green,” also referred to as “being sustainable,” “eco-friendly,” and “future-friendly” isn’t an amenity in commercial real estate (CRE) anymore. It is a necessity, for both CRE organizations and for their tenants.

In fact, “61% of corporate leaders believe that sustainability leads to market differentiation and improved financial performance,” according to a comprehensive 2011 report from McGraw Hill Construction.

I know, I know. “It isn’t easy being green.” Except that, well, it is. And it is only getting easier with the increasing number of professional certifications, programs, and companies dedicated to helping property owners make their properties more sustainable.

The U.S. Green Building Council’s LEED Certification, The Green Building Initiative’s Green Globes system, The U.S. Guiding Principles for High Performance and Sustainable Buildings, and a variety of CRE Tech companies, are working hard to make it that much easier for CRE organizations to be more environmentally sustainable.

The roadblock stopping many CRE organizations from becoming greener is more of a matter of mindset and financials. That’s a pretty big problem when sustainable practices are becoming more and more the norm, both for the planet and among CRE organizations.

So what can be done to inspire adoption of green building initiatives given the anticipated initial cost and self-imposed barriers?

Simply put, word needs to get out that being sustainable in CRE isn’t necessarily about being an earthy-crunchy organization (though from an ethical and PR standpoint this certainly helps). It is more about how sustainable practices can help you meet your organizational goals and meet tenant expectations.

The Value of “Green” and Tenant Expectations

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We’ve said it before, and we’ll say it again – your tenants demand, and deserve the best, and it is up to you to make sure that your team is delivering. That includes anticipating what will help your tenants succeed on an organizational level.

So what can going green do to help tenant organizations succeed?

According to a joint 2015 report on ‘The Impact of Green Buildings on Cognitive Function’ from the Harvard T.H. Chan School of Public Health, Syracuse University Center of Excellence TIEQ, and SUNY Upstate Medical School (with a gift from United Technologies), green buildings:

  1. Improve indoor environmental health
  2. Positively impact cognitive function
  3. Lead to better long-term worker safety

Tenants also benefit from the public perception that they are actively working to be more sustainable with their business practices – including that of their own tenant employees!

In fact, LEED-certified buildings have been seen to increase recruitment and retention rates, as well as overall employee productivity, according to this 2011 ‘Green Building Market and Impact Report.’ That’s an incredible value that is difficult to measure.

But that’s not all.

Efficiency Means Savings!

green-building_treeThe value of going green in CRE isn’t just for tenants. (If it were, it would be classified as an amenity!)

Many of the methods and technologies used to qualify properties as “LEED-certified,” or “Green Globes certified” reduce your overall energy use, which in turn, reduces your operating costs.

For instance, in the ‘Green Building Performance: A Post Occupancy Evaluation of 22 GSA Buildings,’ LEED-certified buildings were said to use 25% less energy, and offer a 19% reduction in aggregate operational costs in comparison to non-certified buildings. Tax benefits and incentives are also typically available depending on your property location.

Not too shabby, right?

While admittedly there is always the risk that the short-term cost of implementation may be higher than the short-term savings – a conundrum which hybrid and electric car owners can relate to – it isn’t easy to measure the ethical impact, as well as some of the intangible value like perception.

The reality is, CRE going green is about more than just saving money.

It’s Also About Connections

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As our good friends at Genea put it, “Sustainability is a Collective CRE Consciousness.”
The more that folks in the commercial real estate industry know about how going green, and improving the efficiency of their buildings, the faster adoption will take place. And that is something that everyone in CRE (and outside it) can benefit from.

Property owners, and property management teams benefit from reduced costs, better public perception, and happier, healthier tenants.

Tenants benefit from being surrounded by a more positive environment, both from health-wise, and from a perception standpoint in and outside of their organization.
Everyone else benefits from a reduced environmental footprint, and more visible environmental leadership within individual communities, which inspires improved sustainability practices.

Going green isn’t an amenity in CRE. It’s simply the right thing to do, for everyone.