Green Features Attracting Tenants to New Buildings
Tenant expectations that new buildings will be green and energy-efficient are driving significant changes in both the commercial and multifamily building markets, according to experts who spoke at a recent conference hosted by the Urban Land Institute (ULI).
“One of the big factors driving green building is the concern regarding what it takes to retain tenants,” said Kenneth Hubbard, executive vice president of Hines, an international real estate and investment firm based in New York. “I was talking to a managing partner of a major law firm and he said, ‘I have to be in a green building.’ Why? ‘It’s a major part of recruiting new associates.’”
Hubbard served as conference chair of a one-day ULI conference on “Investing and Developing Green: How to Make Money and Cut Costs” on June 23 in Washington, D.C. Discussion topics included green regulations, cap and trade, energy-efficient finance and measuring returns from green investment.
“We have some industrial properties in the Inland Empire that are unencumbered by leases,” said William Anderson, a principal at Prudential Real Estate Investors in Parsippany, N.J. “In those buildings that have the most green features — T-5 lighting, extra insulation and other features — I think those will be the first to lease as the market improves.”
Several speakers suggested that the increasing emphasis on green is leading more firms to focus on the quality of building management.
“Organizations that weren’t particularly adept at management are being asked to manage building performance more effectively,” said Stuart Brodsky, sustainability leader in global asset management for GE Capital Real Estate in Norwalk, Conn. “We’re seeing them achieve better results as they improve their management practices. That means more efficient buildings and improved revenues,” he said.
“One issue for us in terms of quantifying properties is risk assessment,” said Andrew Nelson, vice president of RREEF Real Estate in San Francisco. “We are as much about managing our risk as we are about maximizing revenue,” he said.
“When we buy a property we’re looking seven years out,” Nelson added. “So we’re not building for today’s market — we’re building for a future market. I expect the market to look greener and more energy-efficient seven years from now.”
A panel discussion of cap and trade policy proposals featured Danielle Baussan, majority counsel for the House Select Committee on Energy and Global Warming. Baussan gave a succinct preview of the legislation that passed the House of Representatives just two days later. The measure, the American Clean Energy and Security Act of 2009 (H.R. 2454), passed the House with a vote of 219 to 212. The measure is not expected to advance in the Senate at this time.
Baussan noted that four provisions within the legislation would have the greatest effect on developers, should the measure be signed into law in its current form: energy efficiency requirements for building codes on new construction; retrofitting incentives; rebate provisions for new manufactured housing; and a building performance labeling provision, only applicable to new construction.
While much of the ULI conference focused on commercial properties, there was recognition that many of the same concerns apply to mixed-use and multifamily development.
For more information, e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583.
‘National Green Building Standard’ Available at BuilderBooks.com
“The National Green Building Standard,” available through BuilderBooks.com, provides “green” practices that can be incorporated into multifamily and single-family new home construction, home remodeling and additions and site development.
The standard covers lot design, resource, energy and water efficiency; indoor environment quality; and owner education.
Currently the first and only ANSI-approved green building rating system, the National Green Building Standard is the benchmark for green homes.
To view or purchase this publication online, click here.
The Future of Residential Construction Is Green
The Certified Green Professional (CGP) designation teaches builders, remodelers and other industry professionals techniques for incorporating green building principles into homes using cost-effective and affordable options.
Earning the CGP demonstrates to clients and peers your commitment to the best and latest in green building practices and techniques. More than 3,500 people have earned the CGPdesignation to date.
For more information, visit www.nahb.org/CGPinfo.
‘Build Green and Save’ Available at BuilderBooks.com
“Build Green and Save: Protecting the Earth and Your Bottom Line,” available through BuilderBooks.com, is a comprehensive, easy-to-read reference that shows builders how to identify and select green building materials; implement green construction techniques; explain the benefits of green housing and offer affordable green building solutions to consumers; and use resources wisely and reduce water and energy consumption.
To view or purchase this publication online, click here, or call 800-223-2665.