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Environmental Sustainability


The idea of going green can be either exciting or intimidating for any size developer. While utilizing sustainable measures in building or remodeling is appealing it usually also typically brings more work into the picture as well. Additional experts to consult with and added costs are all normal when going green. Investors and bankers may not see the bright side of bringing in environmental sustainability when it costs more money and may decrease the bottom line initially but over time it can increase energy savings costs and property value. Energy efficiency is perhaps the best advantage of going green and when done correctly it also makes good financial sense over the long run. Heating, cooling, and energy are all top ways that projects can go green.

A green building certification program known as Leadership in Energy & Environmental Design, or LEED, recognizes green building projects that implement best-in-class building practices and strategies. LEED is based on a point system with a maximum of 110 points on the scale, with a  minimum of 40 points needed to be LEED certified. Four different levels of certification exist ranging from Certified, Silver, Gold and Platinum. Certified is the lowest grade, and then the grades increase through the other three levels. Renewable energy and building efficiency are all weighed out to produce the LEED rating. As of October 2014, over 3.3 billion square feet of building space had been designated as LEED certified. The number of LEED projects have been increasing significantly year after year and are projected to continue.

Sustainable buildings make good business sense as they help the community, reduce energy costs, entice tenants, and show environmental concern by the developer. Green real estate can be appealing too. The top three industry sectors that have the highest penetration of green building to date are education, health care, and office. The U.S. Green Building Council estimates that in 2015 nearly 50 percent of all new, non-residential construction will be green. According to Green Building Facts, on average green buildings encompass 19 percent fewer maintenance costs, 34 percent less greenhouse gas emissions, 25 less energy, and 11 percent less water.

An increasing number of nonresidential building is going green as both public, as well as private organizations, are setting goals to go green. Lower maintenance costs, decreased energy usage and greenhouse gas emissions are all results of green building as is a higher satisfaction of the occupants. But it’s not just new buildings that are going green. As nonresidential retrofitting and renovation projects are also pursuing green certifications. Among the most cited reason is the decrease in operating costs involved in the property. Additionally a higher asset valuation can also be expected in many cases. Water, energy, and waste efficiency are all being addressed through a variety of different sustainability initiatives. Some simple improvements can be made to go green, including renewable energy solutions such as installing a solar or photovoltaic device or a roof-mounted wind system. Replacing faucets, toilets, and windows can also be more efficient. Today’s decision makers are engaged in finding energy efficient projects in order to entice a larger tenant pool and also make a property attractive.

By going green in commercial building, it can pay off as those that pursue going green can reap a higher net operating income and increase the overall property value. A variety of different policies and mandates by cities are also pushing green building. Additionally green building can qualify for a range of different incentives including zoning allowances and potential tax rebates. By going green in commercial real estate, a safer environment is created for the occupants as well as an increased level of water and energy conservation. Energy efficiency is helping building owners reduce the average per-square-foot cost of operating a building space.

Cost-effectively delivering an efficient and sustainable commercial building is well within reach and can make financial sense you when you pencil everything out. Green commercial real estate is here to stay.

Business - Commercial Real Estate Industry

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This article contains general information only. Sunflower Bank is not, by means of this article, rendering accounting, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, before making any decisions related to these matters, you should consult a qualified professional advisor.