Overview

With green building on the hearts and minds of many American businesses and business people, the market for green commercial real estate still finds a place, despite the current economic recession. 

References

NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require the member's nar.realtor login.


“Businesses benefit when buildings are built sustainably – operating costs decrease, payback periods are shorter and asset values can increase. It’s important to note that healthier indoor environments are just as much of a motivator for sustainable building, too.” (Buildings, May 1, 2019)  E

Fac​ts

Commercial Building Electricity Reduction
  • Green buildings consume less energy and fewer resources. Standard building practices use and waste millions of tons of materials each year; green building uses fewer resources and minimizes waste (United States Green Building Council, May 24, 2019)
  • Total energy consumption for all commercial buildings in 2012 — 4,241 trillion Btu (Commercial Buildings Energy Consumption Survey, United States Energy Information Administration, May 2016)

Sustainability Information From the National Association of REALTORS®

  • Eighteen percent of respondents reported that their Commercial Information Exchange (CIE) had green data fields, and the CIE green data fields were used to promote energy information and green features.
  • A majority of agents and brokers (69 percent) said that energy efficiency promotion in listings was very or somewhat valuable.

2021 REALTORS® & Sustainability: Commercial Report (National Association of REALTORS®, Jul. 2021, p. 5)

What Is a Gree​n Building​?

Going ‘Deep Green,’ Office Buildings Give Back to the Planet (The New York Times, Jul. 14, 2020)

A quirkily designed structure, the Bullitt Center has an angular overhanging roof equipped with photovoltaic panels that produce enough energy to power the building, with the balance sent to the electric grid. Rainwater is gathered and purified for drinking. The building is like a living, breathing tree that contributes to the ecosystem, said Paul Schwer, president of the engineering company PAE, which worked on the building and is one of its tenants.

Sustainability Checklist for Buildings (Buildings, Jul. 1, 2020) E

  • Does your facility turn off lights and HVAC in rooms when not in use, either manuallyor through scheduling?
  • Do you adjust HVAC and lighting to seasonally appropriate levels and schedules?
  • Does your building use energy efficient lighting in meeting rooms, foyers and halls?
  • Have you designated and enforced “no idling zones” at the key access points?
  • Do you conduct audits of energy use to measure and improve efficiency?
  • Do you offer electric hand dryers in public washrooms?
  • Does your building purchase green or renewable energy (solar, wind, tidal)?

How Office Owners are Achieving Net Zero Goals (WealthManagement.com, Apr. 29, 2021)

“Any existing building’s carbon emissions can be reduced, and the first step is to understand its current level of performance,” says Elizabeth Beardsley, senior policy counsel for the U.S. Green Building Council (USGBC). She adds that this requires metering and reviewing utility bills and any other available building performance data that can help identify areas in need of increased operational efficiency and performance.

The Green Building​​s Market

'Cool’ Roofs, Cooler Designs as the Building Industry Embraces Energy Sustainability (The Washington Post, Jun. 8, 2021)

In Mazria’s view, building “green” is not a hard sell, especially given cost-effective design approaches that can produce high-performance buildings with little to no energy consumption or emissions. Strategies include considering a structure’s shape and orientation on a site, adding “cool” roofs that reflect more sunlight and absorb less heat, and more. “In 50 years, I’ve never heard a client say they want an inefficient building that costs more to operate and damages the environment,” Mazria said.

Debunking the Myth of Green Unaffordability (Forbes, Mar. 24, 2020)

One global study conducted by the World Business Council for Sustainable Development found that critical players in the real estate and construction sectors frequently and drastically misjudge the costs of green building. The survey’s respondents estimated that building sustainably would be 17% more expensive than conventional construction. Their expectations were more than triple the actual cost difference, which researchers found to be 2%.

Sustainability & Commercial Real Estate Investment (Utah Property Investors, Mar. 11, 2020)

Studies show that LEED-certified buildings have higher average lease rates and higher average sales prices per square foot — the logic being that if operating costs are lower then that will directly affect the net operating income in a positive way, thereby increasing value. There are many companies that are choosing only to lease in LEED- certified buildings, which is increasing demand as well. So regardless of increased efficiencies, commercial property values are also being driven by the demand created by the “green” trend.

Converting Existing ​Buildings to Green

The Right "Fit": New Research Shows Certain Factors Can Influence the Success of an Energy Retrofit (School of Architecture, Planning and Preservation, University of Maryland, Aug, 21, 2020)

In fact, the team points to a cost-benefit “sweet spot” in retrofit construction: projects between $200 per square foot and $450 per square foot proved to have a higher chance of achieving net-zero energy savings. Of the three most expensive retrofits in the study, the construction elements that actually contributed to the net-zero goal, such as solar panels or window replacement, only accounted for 15% of the total construction cost.

What The Empire State Building's Switch To Wind Power Tells Us About Sustainability In NYC (Forbes, May 4, 2021)

In January, the Empire State Realty Trust (ESRT), which owns the skyscraper and 13 other office buildings in the city, became the nation’s largest real estate user of fully renewable energy when it signed multi-year wind power contracts with Green Mountain Energy and Direct Energy. In total, these contracts are expected to provide 300 million kilowatt-hours of electricity across 10 million square feet of New York real estate — enough to light every home in New York State for a month.

With Greening Buildings, Be Sure to Consider Resilience (Facilities Net, Dec. 20, 2020)

Renovations or greening of buildings often consist of re-roofing, replacing old HVAC equipment, adding solar panels, adding energy improvements such as new windows, rainscreens, and insulation, updating plumbing fixtures for reduced water usage, refreshing architectural finishes, and adding amenities. Buildings can even undergo adaptive reuse, such as turning an old factory into a new office building, a shopping mall into a distribution center, or in the new COVID reality, turning an office building into housing.

Adaptive Reuse: A Guide for Aspiring Developers (Millionacres, Jul. 22, 2020)

The last major benefit of adaptive reuse is that it's far more sustainable than tearing down a historic structure and redeveloping the lot. In general, adaptive reuse uses far less building materials than a new construction project. Aside from saving on the environmental impact of producing the materials, there's less of a carbon footprint associated with transporting those materials. Additionally, since there will be no demolition involved, less heavy machinery is needed and less energy is used overall.

How to Make Old Buildings Green (And 5 Cities Doing It) (Green Building Insider, Apr. 2, 2020)

Boise has an extensive geothermal energy network, with geothermal providing heat for more than 90 buildings downtown. Additionally, the city installs solar panels on commercial buildings. Using renewable energy is a straightforward way to reduce energy consumption in old buildings without the need for new infrastructure.

Green Building T​ren​ds & Case Studies

How to Build Smart, Zero Carbon Buildings - and Why It Matters (World Economic Forum, Sep. 8, 2021)

A recent study suggests that Grid-interactive Efficient Buildings (GEBs) can reduce energy costs by up to 20% through active demand management. Energy optimization can control a building’s energy use based on the real-time carbon intensity of the grid and coordinate the use of clean heating resources with backup fossil fuel equipment to minimize carbon emissions on a 24/7 basis while providing demand flexibility and resilience.

See Inside Utah’s First ‘Living Building’ — Can This Approach Help Save the World? (The Salt Lake Tribune, Sep. 6, 2021)

In addition to being net positive on electricity and lowering water consumption by nearly 80%, the Arch Nexus project is also novel among living buildings as a renovation as opposed to being built new — taking advantage of an axiom in the adaptive reuse of existing structures that “the greenest building is one that is already built.”

Facing Severe Droughts, Developers Seek to Reuse the Water They Have (The New York Times, Aug. 4, 2021)

Commercial real estate is “where the balance of the pendulum” is for water conservation, said Paul O’Callaghan, the founder of BlueTech Research and a co-producer of the 2020 documentary “Brave Blue World: Racing to Solve Our Water Crisis.” Roughly a third of the water use in San Francisco, for instance, takes place in commercial buildings.

Green Building C​​ertifications

New York’s Proliferation of Green Building Rating Systems Raises the Question of What’s Being Measured (The Architect’s Newspaper, Sep. 7, 2021)

One high-profile Manhattan building crops up again and again in discussions of prediction/performance discrepancies: the Bank of America Tower at One Bryant Park, the first skyscraper to be rated Platinum by LEED, now graded C by the DOB.

Green Building Labels: Information or Marketing? (University of San Diego, Feb. 5, 2021)

Gabe’s research suggests that building occupants — who pay a premium to inhabit “green” buildings — are either primarily interested in the marketing value of the label or are unaware the building isn’t delivering on its promise.

BOMA 360 Performance Program (Building Owners and Management Association International)

LEED Rating System (U.S. Green Building Council)

LEED Zero (U.S. Green Building Council)

Green Commercial Finance

Office Giant Boston Properties Raises $850 Million with New 12-Year Green Bond Financing (MarketWatch, Sep. 15, 2021)

The financing marks Boston Properties’ fourth green bond overall and comes as corporate America rushes to issue hundreds of billions’ of dollars worth of debt in September, including more designed to finance projects with lighter environmental footprints.

The Wait is Over: C-PACE Finally Goes Live in NYC (The Real Deal, Jun. 15, 2021)

Property owners can retroactively tap the financing tool to secure a lower interest rate for work already done on projects like adding LED lights, upgrading insulation or installing solar panels on buildings. C-PACE financing can also replace existing debt that building owners took on to make these energy-savings improvements.

How Green Are Green Bonds? (KelloggInsight, Jun. 9, 2021)

When investors evaluate an investment in a traditional, not-green bond, they consider whether they will receive an adequate return on their investment to compensate for the credit risk of the issuing company. However, green bonds are different. Here, investors should also evaluate the environmental impact of their investment—and critically, whether the proposed green investment would have been undertaken even if they were not to provide funding.

Kimco Realty Debuts Green Debt as It Boosts Focus on ESG Issues (Bloomberg.com, Jul. 7, 2020) E

The real estate investment trust is selling $300 million in green bonds, according to a person with knowledge of the matter. The single-tranche offering maturing in 10 years may yield 2.55 percentage points above Treasuries, said the person, who asked not to be identified as the details are private.

Green Bond (Investopedia, Mar. 9, 2020)

A green bond is a fixed-income instrument designed specifically to support specific climate-related or environmental projects.

Useful ​We​bsites

Penn State Center for Green Roof Research — The Center, the only location in North America with small test green roofs on replicated buildings, characterizes and quantifies the performance of green roofs and promotes their discoveries through education and outreach.

Building Green — Our focus is on helping you design and build from a whole-systems perspective. We support teams that use an integrative process that reduces ecological impact—or even provides regenerative support for ecosystems—and that maximizes return on investment, both financially and in benefits to occupants.

ENERGY STAR Commercial Buildings — When you achieve Designed to Earn the ENERGY STAR, you get access to a suite of marketing materials to help you distinguish your building as designed to be a top energy performer … meaning it will use less energy, cost less to operate, and generate fewer greenhouse gas emissions than a similar building.

Greenroofs.com — Updated daily, Greenroofs.com is a dynamic interactive website, online media company, vibrant social network, and comprehensive resource Connecting the Planet + Living Architecture promoting People, Projects & Solutions.

U.S. Green Building Council (USBGC) — The USBGC, the leading organization for green building in the U.S., administers the LEED (Leadership in Energy and Environmental Design) Green Building Rating System®. Their website features information on LEED certification, publications, information on workshops and other events, and more.

To search the U.S. Green Building Council’s membership community of over 12,000 business, organizations, and government offices that support green design, check out their Organizations Directory.

World Green Building Council — Green Building Councils are independent, non-profit organisations made up of businesses and organisations working in the building and construction industry. As members of WorldGBC, they work to advance green building in their own countries, as well as uniting with other Green Building Councils to achieve environmental, economic and social goals on a larger, global scale.

Green Building Initiative — A 501c3 nonprofit organization, the GBI is dedicated to accelerating the adoption of building practices that result in energy-efficient, healthier and environmentally sustainable buildings.

eBooks & Other Resources

eBooks.realtor.org

The following eBooks and digital audiobooks are available to NAR members:

Green Building Through Integrated Design (eBook)

Green Buildings A to Z (eBook)

How to Design and Build a Green Office Building (eBook)

Land Use Law for Sustainable Development (eBook)

Retrofitting Office Buildings to Be Green and Energy-Efficient (eBook)

Books, Videos, Research Reports & More

The resources below are available for loan through Member Support. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Member Support at 800-874-6500 for assistance.

Routledge Handbook of Sustainable Real Estate (Abingdon, Oxford: Routledge, 2018) HD1390 .R684 2018

The Green Building Revolution (Washington: Island Press, 2008) TH880 .Y634 2008

The Philosophy of Sustainable Design: The Future of Architecture (Kansas City, MO: Ecotone Publishing, 2004) NA 2542 M35

Green Buildings Pay (London: Spon Press, 2003) NA 2542 G72


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