Are developers reluctant to build “Green” buildings? Why do you think that is?
I believe that in today’s world developers are delighted to build “Green” buildings. We already have studies that indicate Green buildings often attract more and higher caliber tenants and result in longer-term tenants, plus, the cost differences between a non-Green and a Green and sustainability focused building are today minimal at best. Also, many of the strategies and technologies that make a building Green are simply those now considered “state of the art” in most building designs. So while some developers may not call them “Green,” they still develop facilities that implement energy- and water-efficiency strategies, use safer building materials, and more.
How interested are building owners/managers in energy and sustainability certifications? What is the trend now? Is there an increased interest compared to previous years?
Whole building and sustainability certifications seem to remain very popular and are growing among real estate investment trusts (REITs) and in the commercial office building market in major cities around the globe. This seems to be particularly true among the large corporations that make up the Standard & Poor’s 500 and Fortune 500. Other programs are flourishing; for example, EPA’s ENERGY STAR is expanding rapidly, which we believe is a result of its ease of use and lower cost compared to more complex and costly whole building certification programs.
Is the subject of “Green” buildings more of interest for large real estate owners/investors/developers (companies, REITs, funds) or are individual, smaller owners/investors/developers also preoccupied in putting “Green” property on the market? Why do you think this is?
While there are some terrific smaller real estate owners/investors/developers that have been true leaders in the field, generally we find that larger companies have a greater ability in this area. Sometimes this is due to cost issues such as the cost of internal expertise, the cost to hire consultants to help them with their Green building programs, or the cost of the certification process itself. However, it is important to remember that many companies and developers, small and large, are implementing Green strategies into new and even existing facilities, but they may not be certifying their buildings.
How do you see the future when it comes to this subject? Do you think sustainability will become a major concern of all stakeholders involved in real estate?
I think sustainability will become a major concern for all companies, institutions and the public simply because it is a smarter approach to how we work, learn, live, and conduct ourselves. Regardless of the terms we use, everyone agrees that saving money is a good thing; as are eliminating waste, increasing efficiency, using safer materials, protecting health, reducing risk in the supply chain, and caring for our people. Investors believe these things, as do building owners and developers, policy makers and the public. So paraphrasing the words of Victor Hugo, “it is an idea whose time has come.”
What is the most problematic aspect when it comes to “Green” buildings? What is the most ignored aspect? (of the six you track through the Sustainability Dashboard – energy, waste, transportation, water, products, human resources)
Generally, I find the most problematic area is just getting started. Buildings use a lot of “stuff” and collecting all the data can be challenging, especially if the suppliers are reluctant to provide the information. Plus, keeping up with changes can be a daunting task as the tenants change, building usage changes, technologies change, etc. Thus, ensuring the accuracy of the data, especially if it is used to manage the organization and building (as opposed to simply providing an annual sustainability report) is challenging for many organizations. As to the most ignored aspects, there are two. The first is transportation, which is often considered outside the scope for many who report on their sustainability initiatives. However, we know that transportation has huge impacts on our environment/climate. And the second is relative to social equity, especially for smaller organizations.
How could we improve the aspect of sustainability in commercial real estate in the following years?
We need to standardize and simplify what information is important and standardize how that information is reported. I worry that in some, and perhaps many, cases the quality of the data is poor, which will lead to buildings that simply are not performing the way they have been marketed. Plus, those strategies and technologies that are deemed “best practices” should be written into local building codes so that all developers are operating from the same “playbook”. This will help level the playing field, increase competition and ultimately accelerate the improvement of our all of our buildings.