The Greening of Commercial Real Estate
| Read comments | Add comment / Rate this Article | Article by: Mark Casey |
“In times of change, the learners will inherit the Earth while the knowers will find themselves beautifully equipped to deal with a world that no longer exists”. -Eric Hoffer, Author (1902 - 1983)
The Greening of Commercial Real Estate[1]
Commercial real estate is about to join the green revolution…..and for good reason. Buildings in the U.S. account for:
- 36% of Total Energy Use;
- 65% of Electricity Consumption
- 30% of Greenhouse Gas Emission
- 30% of Raw Material Use 2
Far more than any other sector of the economy, commercial buildings represent the single greatest opportunity to reduce our national carbon imprint and to jumpstart our economy. Savvy commercial brokers, property managers, landlords and developers will be jumping in not just because it is good for the planet, the economy, but because it will be good for their businesses. And those who do not join in will find themselves, in Hoffer’s words,”….beautifully equipped to deal with a world that no longer exists.”
Energy Efficiency and RenewableEnergy taken together is one cornerstone of the Obama Green New Economy. $18.5 Billion of the Obama $825 Billion has been earmarked for renewable energy, alone. Energy Efficiency, such as high efficiency lighting, and Renewable Energy, such as Solar Photovoltaics, can be applied to most existing commercial structures, with financial funding from Xcel Rebates, Federal Tax Credits and Savings on Utility Consumption. The benefits of energy efficiency/renewables are substantial and measurable to the tenant, building owner, the real estate broker/advisor, and the planet.
Improved Efficiency = Happier Tenants = Enhanced Property Value. It all starts with increasing Energy Efficiency. These simple, proven measures can significantly reduce a building’s operating expenses by upgrading facilities with engineered energy efficiency solutions and energy consumption monitoring systems. Typical projects include lighting, heating, and control systems that reduce energy consumption by 50% or more, thereby yielding rapid customer paybacks and impressive ROI’s, while improving the comfort and quality of the facility. The tenants benefit through a reduced utility bill and greater comfort; landlords benefit through a more valuable building; brokers benefit through being able to add additional value to their clients while earning referral fees; the economy benefits through generating new ‘green collar’ jobs; planet benefits through reduced carbon emissions
Look West to California AB 32. We in the Colorado commercial brokerage community will either embrace this new green way of being, or the government will impose it on us. A good example of such a government mandate is California Assembly Bill 32, which requires an across-the-board 30% reduction in greenhouse gases (including cars) by 2020. Some may see this as a drag on the economy while others see it as an opportunity. Like Steven Chu, our new Secretary of Energy, I see this as a tremendous economic opportunity for those early adopters who get on board early, as use this to their advantage.
If the private sector fails to act boldly, we will see it mandated through more government regulations such as AB 32. Now is the time for commercial property owners to invest in efficiency and renewables, for the benefit of the economy, the planet and the protection of their investment.
[1] Title adapted from the 1970 classic book by Charles Reich “The Greening of America”.
2 Statistics from the U.S. Green Building Council
This information is not intended to replace qualified legal and/or tax advisors. Every taxpayer should review their specific transaction with their own legal and/or tax counsel.
