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Is Green Commercial Real Estate Gold?

green real estateLet’s start with some really exciting statistics:

  • According to the American Public Transportation Association (APTA), nearly 43% of America’s energy resources are used for transportation.
  • According to the APTA,  for every passenger mile traveled, public transportation emits 95% less carbon monoxide, 92% fewer VOC’s (Volatile Organic Compounds) and almost 50% less carbon dioxide and nitrogen oxides than private vehicles.
  • According to the U.S. Census Bureau, in 2006 an estimated 24% of all workers in the U.S. used alternative forms of transportation, such as carpooling, walking, telecommuting, and public transportation.
  • Using native or adaptive plants typically use less water and chemical fertilizers than non-native or exotic plants.
  • According to the U.S. EPA, storm-water has been identified as a major source of pollution for all types of water bodies in the U.S.
  • According to the U.S. EPA, ambient temperatures in urban areas are artificially increased anywhere from 1-10 degrees compared with surrounding areas.
  • According to the USGBC, heat islands exacerbate air pollution, including smog, and increase cooling requirements, in turn increasing energy demand and emissions.
  • According to the USGBC, light trespass from poorly designed outdoor lighting systems can affect the night sky and nocturnal animals.

Water Efficiency-

  • According to the Energy Information System, water heating in commercial buildings accounts for nearly 15% of building energy use.
  • According to the USGBC, lower potable water use for toilets, showerheads, faucets, and other plumbing fixtures reduces water withdrawn from underground aquifers and from rivers, streams, and other waterbodies that support aquatic ecosystems.

Energy, Environment & Atmosphere

  • According to the US Department of Energy, properly executed O&M programs that target energy efficiency have been shown to save 5%-20% on energy bills without significant capital investments.
  • Chlorofluorocarbons (CFCs) and Hydrofluorocarbons (HCFCs) deplete the ozone layer and cause Global Warming.  Go green and reduce the usage of CFCs and HCFCs.
  • According to the US EPA, Simon Property Group implemented a Web-based tracking tool for energy use.   Between 2004-2005 Simon cut 6.8% of their electricity use compared to 2003 and saved 84,000 metric tons of CO2 emissions (enough electricity to power nearly 10,800 US homes for a year).
  • + 5,000,000 – Combined # of commercial and industrial buildings in the US.
  • $202.3 billion – Combined annual energy costs for US commercial and industrial buildings.
  • 30% – Portion of energy in buildings used inefficiently or unnecessarily.
  • 45% – Combined percentage of US Greenhouse Gas emissions generated by commercial buildings.
  • 10% – Percentage of energy use reduction targeted by the ENERGY STAR Challenge.
  • $20 billion – Amount of money that would be saved if the energy efficiency of commercial and industrial buildings improved by 10%.
  • Buildings represent over 50% of US wealth.
  • Buildings account for:
    • 1/6 of the world’s freshwater withdrawals;
    • 1/4 of its wood harvest;
    • 2/5 of its material and energy flows.

So what do these thrilling statistics tell us? Obliviously many things but for me ,  Simple. The Commercial Real Estate business in general has a HUGE effect on the environment and in my opinion.  Commercial Real Estate Brokers and all people in the Commercial Real Estate related  business should have a HUGE stake in the  “Green  Movement.”  Now, before you think,   I’ve drank from the same cup of Kool-Aid as Al Gore (inconvenient idiot?) or I am about to begin a tutorial on how to hug a tree:  tree-hug

Think again, I am a Commercial Real Estate broker and my pragmatic analytic money making brain thinks that I need to jump full onto this eco-friendly bandwagon, or get run over by it.  If you look at the Commercial Real Estate landscape (that one came naturally) what are the Green things we as Commercial Real Estate people should be aware of?  The first link and best source of information is the USGBC.

The USGBC is one of the most valuable resources of information, for me. Keeping updated news events and most importantly Commercial Real Estate specific education.  Once you have browsed the site the next think you will want to know is, what is LEED?  Please take 2 minutes out of your life to watch this video.   It is simple clear and is the best explanation of LEED.  See, now you know.  The next step is to get LEED Certified.  There are many different classifications.

Now that you are certified the next question is, “How do I make money with this?”  Well that is a great question.  I am helping ramp up a Local USGBC chapter,  and that is one of the issues we are working on.  The diversity of the business involved and the networking opportunities are well worth the time and effort.  Maybe some of the readers of this post could chime in with some of their real world experiences.

One of the interesting sides of my involvement with the group is that a group of students from local university has become involved.  Find some students in your area ask the leader or members of the group to lunch.  The topics of the lunch conversations were:   Green jobs,  green job fair, on campus meetings to attend and speak at.  Community subsatinability, teaching or volunteering to help local business owners to use green and sustainable practices for savings.  Tours of the university to see their efforts.  Event on campus to showcase businesses, products, and people.  Possible meetings with local government and economic development organizations.  Volunteer to show them how to be green.  The students also had great interest in real world experience from the Commercial Real Estate point of view and  all of these conversations centered on the basic LEED principles.  One of the big questions from the lunch was, “Who can we look to now?”

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My answer:  the BIG BOYS.  In my business that is CB Richard Ellis ranked the #1 green company in Real Estate.  Take one look at their efforts and they are GREEN everywhere.   They even have Green Tweets.   Jones Lang LaSalle also does a great job.  Of course, the students had no clue who these companies are, so I mentiontened Wal Mart, and they were like “ no way dude”.  Love them or hate them they are leading a green pathway and we should all take notice. Think of the amount of Land and Square footage they have under roof to manage.  And before my brain exploded they said “ dude ..they always say dude,  you need to check out The Green Build Expo.  So I did, and WOW!   27,000 attendees, the sessions, tracs  and the product knowledge.  This event is in Chicago next year in November of 2010, and Yes, I am so there.  The lunch, however, was interesting, stimulating and fun.  I had to go home and take a nap after lunch.   My brain and old body needed a rest.

The lunch did solidify many things for me.  Research more.  I need to have the Green knowledge. I need it and my clients need me to have it.  Get involved, not just locally but on a regional level.  The knowledge may be there but there has to be some business there also.  If the big boys are doing it then it’s not just for fun and green hugs.

The “greening” of Commercial Real Estate is not a fad, but rather a fundamental change.  Commercial Real Estate groups that want to attract the best deals, strategic investors, and marquee anchor tenants should realize this change.  We need to embrace it.  gorillaWill we turn Commercial Real Estate Green into Gold?

Written By

Broker/Owner in Lafayette, IN, whose passion is Commercial Real Estate with focus on Technology, Social Media, and Networking.

17 Comments

17 Comments

  1. Doug Lazovick

    November 30, 2009 at 2:20 pm

    Duke,

    With all those facts, I thought I was studying for my LEED AP all over again 😉
    Honestly, couldn’t agree with you more about Green being a fundamental change for CRE. Get on board before the train leaves the station.

    Doug

  2. Duke Long

    November 30, 2009 at 2:50 pm

    Doug,
    What no controversy ,no green is BS, well I do appreciate when someone agrees with me. Thanks

  3. Joe Stampone

    December 1, 2009 at 11:35 am

    Duke, thanks for this write-up. I think a developer would have to be extremely stupid not to build green. Beyond our social and environmental responsibility, there is no longer much of a premium for building green. I highly recommend a new ULI book called “Greening our Built Environment: Costs, Benefits and Strategies”

    I’m also glad that LEED continues to evolve and introduce new certifications such as LEED for Neighborhoods. I think the short-term future of development is urbanizing suburbs and transit-oriented development. However, for green to really take off, cities will have to increase incentives for green buildings, jobs, and communities.

  4. Duke Long

    December 1, 2009 at 11:57 am

    Joe,
    Could not agree more.
    I have seen a huge effort and open dialogue at my local level to embrace the LEED and or “Green” sustainability concepts. I am literally going to a meeting tonight at our local university for a brainstorming/goals session. One of the first items will be:How do we integrate the Regional/County and City governments into the overall plan? BTW the University is light years ahead of them all,and is the “800 lb.gorilla”. They have already created green roofs,using student ideas and skills and I met the person responsible for all green building and sustainability practices on campus. Amazing.
    The ULI ( Urban Land Institute) is a great organization and thanks for the suggestion.

  5. Ellen Mann

    May 21, 2010 at 8:05 pm

    Appreciated your insight, Duke, and the link to the clear definition of LEED video! Can’t tell you the number of building material suppliers who ask “Why should I consider offering more “green” materials? Why should owners care if there buildings are LEED certified? (and my favorite…) How’s this going to make me money?”

    I’m doing some research on the size of the “green” building market and how the USGBC audits LEED projects. Is there an association of LEED inspectors out there yet?

    Thanks for any feedback

    • Duke Long

      May 23, 2010 at 10:17 am

      Ellen,
      Thank you for commenting. As for association of inspectors? I have no clue. I bet if you search there has to be something started. Check with USGBC. They may be able to help.

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