In Real Estate, Green Still Matters

I N R E A L E S TAT E , G R E E N S T I L L M AT T E R S

M A T T D O H E N Y

• The global real estate market has definitely seen an increase towards the greener end of the spectrum in recent years.

• Due to the effect that our collective environmental footprint has on the world around us, architects, builders, and consumers have placed an added emphasis on sustainability when it comes to real estate developments and investments.

• The benefits of incorporating a greater environmental awareness into your own personal lifestyle are difficult to dispute.

• For years, we have been hearing about the financial rewards of managing energy costs.

• Yet, do potential tenants care enough about such benefits to make them worth incorporating greener amenities into their residential and commercial properties?

• Recent research seems to indicate that they do.

• A joint study commissioned by the University of California at Berkeley and the Netherland’s Maastricht University compared the rental and sales rate premiums of LEED (Leadership in Energy Efficiency Design) and Energy Star-certified buildings to standard properties across the U.S.

H ER E ’ S W H AT T H E I R F I N D I N G S S H O W E D :

• A 3 percent rental rate premium

• An 8 percent effective rental rate premium

• A 13 percent sales premium

• Given the apparent advantages that green properties offer, the challenge then becomes finding cost-effective methods to incorporate green technologies into your new developments, and retrofitting your current properties with them.

• Finding a capable green builder in your area may come at a higher cost, but can be recouped in sale or leasing costs, or through tax credits and savings.

• For your existing properties, the extra expense of retrofitting is one that most researchers have found can be offset on its own.

• The website GreenandSave.com has shown that simple updates such as installing more energy-efficient windows and doors, sealing air leaks, and adding extra insulation tend to pay for themselves through energy savings in as little as 2.5 years.

• Factor in added appeal of offering a green property for sale or rent to other environmentally conscious investors, and you can see how much such an investment can pay off.

The motives behind your move to a greener focus on your current and potential real estate holdings notwithstanding, being more eco-friendly with your home and/or office building offers the satisfaction of knowing that you’re doing your part.