• Mon. Nov 28th, 2022

3 Reasons Commercial Real Estate Brokers Should Pay Attention To Green Building Trends »RealtyBizNews: Real Estate News


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Green building practices are increasingly common.

In fact, 57% of building owners plan to the majority of their green projects by 2021, according to a SmartMarket report.

It’s a myth that these sustainability trends pose challenges for commercial real estate brokers. Increased public awareness of sustainability is develop the market for green buildings.

Given recent trends, there are three main reasons commercial real estate brokers should consider sustainability when doing business.

  1. Sustainability certifications influence decisions of buyers and sellers
  2. Client companies demand greener buildings
  3. Green buildings bring financial benefits to customers

CRE brokers who are aware of these sustainability trends will be better equipped to navigate the changing market.

  1. Sustainability certifications influence decisions of buyers and sellers

Tenants continue to prioritize green building features, such as energy efficient heating and cooling. In this climate, they seek to verified certifications for guidance on what is sustainable.

The use of green building certifications keep increasing every year.

These certifications indicate the efficiency of the building’s water, energy and waste. They can also cover aspects such as lot design, welfare benefits and construction techniques.

The internationally recognized LEED Certification (Leadership in Energy and Environmental Design) is the industry standard. It is awarded on the basis of detailed documentation rather than in-person testing.

Source: CalPolyPomona

LEED is committed to providing healthier interior space, higher resale value, and faster rental rates. Buildings also use less energy, water and other resources, a valuable selling point.

According to Deloitte, 79% of building owners expect green buildings to attract more tenants. It is more and more common to include a sustainability summary in commercial leases, and certifications are a desirable point to include.

Brokers need to make sure they understand the benefits of getting green certification so that they can communicate its value to both parties.

  • Client companies demand greener buildings

Customer demand is the primary reason sustainable construction methods are used (35%), according to the USGBC. Corporate clients, in particular, favor green buildings because of the social benefits and promotional value.

Bank of America and Sprint are two of the many companies that occupy energy-efficient buildings.

Greening office space brings marketing benefits when it comes to recruiting employees and selling goods.

For example, the offices of Honest Tea in Bethesda, Maryland were Featured in Washington Business journal. They are recognized as a certified green company by Montgomery County for the sustainability of their offices and operations.

Source: YScouts

Sustainable features of office space include plants for better air quality, natural light, used desks, and renewable bamboo floors.

When executives search for new office space, they know consumers are willing to pay morefor goods produced by companies with sustainable practices. Additionally, potential employees, especially millennials, look for an employer who matches their values.

Company stakeholders refer to the company’s annual sustainability reports for data on company practices. When executives occupy a green building, they can include the social and environmental benefits of their office in their annual report.

In addition, sustainable offices have positive effects on employee performance and retention. According to Green Biz, sustainable buildings lead to improved health and productivity.

In fact, a Harvard study found that the cognitive scores of tenants in green buildings were61% higher than those in conventional environments.

Due to these factors, it is no wonder that green buildings are a growing trend among large companies.

When engaged in discussions about an office space with a business buyer, make sure you understand their sustainability perspective and priorities.

  • Green buildings bring financial benefits to customers

Green buildings can lower costs for buyers and increase income for sellers. According to the World Green Building Council, the initial costs of greening a LEED building will be offset by long-term cost reduction.

Additionally, Deloitte reports that rising environmental costs have outpaced revenue growth for REITs. These costs come from sources such as air pollutants and water extraction.

Given the costs of environmental damage, buildings that operate in harmony with the natural environment will save money in the long run.

For example, redeveloped buildings with sustainable features offer savingsthrough energy efficiency.

The Empire State Building is a remarkable example. It was redesigned with sustainable features in 2011 such as demand-controlled ventilation and a tenant energy management program.

Source: Empire State Building

The improved features were expected to result in $ 4.4 million in savings on utility bills every year. In his first year, he exceeded those targets by 5%.

The Rocky Mountain Institute reports that the renovated Empire State Building “established a commercial real estate model to reduce costs, maximize return on investment, increase real estate value and protect the environment.

Corporate customers, in particular, will benefit financially from greener building features. According to a Report of the World Green Building Council, the reduced energy costs of a greener corporate building can be paltry compared to the savings resulting from increased productivity.

In addition to lowering costs, green buildings are easier to sell for a higher price, according to Deloitte. They depreciate slowly and are more likely to meet the expectations of sophisticated buyers.

A study by the University of California at Berkeley found that office buildings certified as green rented 2% more as similar buildings in the area.

Your discussions with potential buyers and sellers should include the potential savings associated with occupying a green building or greening an existing building.

Offer advice on sustainable construction practices to your clients

Trends in sustainable construction will only become more and more intertwined with commercial real estate. Brokers must be aware of the benefits sought by buyers.

Customers, especially businesses, value green infrastructure. Sustainable design choices increase productivity and employee retention. The energy efficient features of green buildings also mitigate costs in the long run.

The demand for green buildings will continue to grow and brokers need to keep abreast of the latest practices in order to serve this growing market.

Nicole Schlabach is Content and Editorial Associate for Clutch. She produces, processes and conducts quality assurance for content for Clutch journals that help make the platform the main resource for B2B research, ratings and reviews.

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