Its old school thinking that it costs money to go green with your commercial real estate holdings. The world is full of examples where the initial cost of a green initiative is recovered in six months or less with everything after that being savings in the form of lower expenses. Today's commercial real estate investor can no longer ignore both the financial and environmental benefits of going green.
The Hurt Building, a skyscraper built in downtown Atlanta in 1913, is LEED-EB Platinum, BOMA 360, and Energy Star Certified. It is the oldest commercial office building to achieve this rating. Two accomplishments were adding a condensate reclamation system to its cooling tower basin and installing low flow water fixtures in the building's restrooms. The condensate reclamation system extracts non-potable water from the air for use in the building's temperature control system. The two changes reduced the buildings water usage by 40 percent and the full cost was recovered in less than six months.
Some commercial real estate investors state that it can be as simple as replacing faulty temperature sensors in office and other buildings. Faulty sensors reporting incorrect high temperatures during the summer cause the air conditioning to overwork as well as causing hot and cold spots. During winter months, incorrect low temperature readings cost money and energy by overworking the heating system.
Do you have escalators in your commercial buildings? Adding a sensor that slows down the escalator when no one is on it reduces energy costs by 30 percent.
We've heard a lot about compact florescent lighting (CFL) being a great alternative to incandescent lighting. But that's changing even as you read this article. LED lighting has come a long way and is still revolutionize the lighting industry. A 75-watt incandescent light bulb can be replaced with an LED consuming 3 to 13 watts, while emitting the same amount of light. Turning it on for 8 hours a day costs about $2.00 in electricity for an entire year. The LED bulb won't need to be replaced for 10 years.
These costs are reduced even further with the addition of a system optimizing artificial lighting levels based on ambient sunlight coming in through windows.
The National Association of Office and Industrial Properties (NAIOP) conducted a survey asking commercial building owners what motivated them to go green with their properties. Over 85 percent responded that being competitive in the market is a very important motivator. Approximately 75 percent said it is very important to lowering their utility costs. Moreover, a whopping 92 percent said it is important being able to market a green building to potential tenants.
The same survey asked tenants what green initiatives are most important to them. The number one and two "go green" initiatives requested by tenants are energy efficient lighting and HVAC systems. Those are followed by:
There was less interest in:
The U.S. Green Building Council reports that during the recession, green buildings maintain an occupancy rate between 4 percent and 8 percent higher than non-green buildings. Other typical green real estate investor benefits include:
The fact has become clear that going green is no longer an expensive way for commercial real estate investors to improve their environmental footprint. It has moved beyond being financially viable to becoming financially superior.
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Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for eleven years. He also draws upon 25 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest in the Olympic Mountains with the Pacific Ocean a couple of miles in the opposite direction.