Green Property Management

Green Sustainable Office Building in Shanghai

Green Property Management

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Quick Takeaways

Adaptive reuse can cut down on carbon emissions
Software can assess the value of old foundations, concrete and other building materials
Some buildings in Europe are built as future material banks

Source: To Make a Greener Building, Start with an Old One (Wired, Jun. 8, 2023)

Green leases (also known as aligned leases, high performance leases, or energy efficient leases) align the financial and energy incentives of building owners and tenants so they can work together to save money, conserve resources, and ensure the efficient operation of buildings. Energy and environmental performance are emerging as key benchmarks in how commercial real estate buildings are judged and priced in today's market. According to a recent survey, 88% of corporate and developer respondents expect to own, manage or lease some green properties five years from now.

Increase your knowledge with NAR’s Green Designation. The Green Designation helps you become an expert on green buildings and green property management. Covid and environmental awareness has driven the need for green buildings and green property management.

Green leases document for tenants, landlords and owners the steps taken to make a property more energy efficient, utility usage and show how tenants can improve their energy efficiency.

Energy efficiency encompasses both heating and cooling. The type of windows in your building also plays a part in energy efficiency. A regenerative building is the ultimate green building by returning resources to the environment through biomimicry and energy efficiency.

NAR has curated a list of websites, journals and certifications to assist you in greening your building.

See References for more information.

References

We've 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.

Green Designation

Looking for more formal training in green property management? NAR's Green designation has a property management track. The Green designation provides real estate professionals with the knowledge and awareness of green building principles applied in residences, commercial properties, developments, and communities so that they can list, market, and manage green properties as well as guide buyer-clients in purchasing green homes and buildings.

For more information, visit the Green Resource Council webpage

Why Go Green?

The Business Case for Green Buildings Economic and Environmental Benefits (Utilities One, Nov. 17, 2023)

Green buildings minimize energy consumption, utilize renewable energy sources, and conserve water. They contribute to the reduction of carbon emissions, preservation of natural resources, and improvement of indoor air quality.

Exploring the Economic and Social Benefits of Sustainable Buildings (Earth.org, Aug. 23, 2023)

Though some costs may be higher, the overall costs of constructing and maintaining a sustainable building are lower than conventional construction methods. Many sustainable buildings can be partially or fully completed elsewhere, limiting the resources used on a job site. Sustainable buildings also have a greater value in the long term compared to traditional alternatives.

Three Reasons to Consider Green Building Certification in Your Business' Next Buy or Build (Forbes, Jan. 10, 2023)

Green buildings are positively perceived in today's market and can command higher lease rates. According to one study, LEED-certified properties earned about 11% higher rents than their non-certified counterparts. When coupled with cost savings from lower utility usage, certification can be an investment that maximizes value across the board.

Green Leases

Green Leases: One Way Managers and Tenants Can Share Net Zero Goals (BOMA.org, Jul. 31, 2023)

As just one example of a green lease clause, Duffy cited charging tenants for additional HVAC hours, which helps lower energy consumption–and ultimately costs–for all concerned. It should be noted that, in her experience, much of the push for green leases is actually coming from the tenants.

The Green Lease: Future-Proofing CRE (King Energy, Jun. 6, 2023)

Commercial buildings need green leases because of the split incentive problem. Tenants don’t want to invest to improve the sustainability of a building they don’t own. Landlords don’t want to spend money to reduce the carbon footprint of a unit that they don’t occupy. Green leases encourage both parties to meet in the middle by aligning on sustainability objectives.

How Do I Green a Lease? (Green Lease Leaders)

We are focused on providing resources that address the 4 most critical steps that impact the ability to do high performance buildings in the long-term: site selection, lease negotiations, tenant fit-out, and tenant operations. In order for green leasing to be integrated into a portfolio and to become standard practice, green leasing must be evaluated during site selection, included and executed in lease negotiations, and operationalized in the tenant fit-out and tenant operations phase.

Energy Efficiency

To Make a Greener Building, Start with an Old One (Wired, Jun. 8, 2023)

Major renovations can require 50 to 75 percent of the carbon emissions of new construction, Zapata says. That makes the most sustainable building one that already exists—and there are plenty available right now.

NREL Researchers Reveal How Buildings Across United States Do—and Could—Use Energy (National Renewable Energy Laboratory, Sep. 14, 2023)

In this way, the profiles can be used to tease apart which energy efficiency measures will be most effective in different regions—enabling better, more informed decision-making. And because efficiency and electrification retrofits represent a major opportunity to reduce U.S. energy consumption and carbon emissions, even small improvements in decision-making can have a significant impact.

Commercial Energy Use Increased in Eight States in 2021 Over Pre-Pandemic Levels (U.S. Energy Information Administration, Aug. 22, 2023)

Commercial energy consumption in 2021 remained below pre-pandemic levels in most states, including every state in the Midwest Census Region, in part because warmer weather reduced the need for space heating compared with 2019. Overall, the United States had 9% fewer HDDs in 2021 than in 2019. The Midwest was even warmer, with 10% fewer HDDs. Of the 10 states with the largest percentage decreases in commercial energy use, 6 were in the Midwest. Iowa, a midwestern state, tied with the District of Columbia (DC) for the largest decrease in commercial energy use.

Designing Buildings that are Both Well-Ventilated and Green (Harvard Business Review, Jan. 9, 2023)

There’s a pure business case for investing in energy-efficient buildings, too. My colleagues and I have estimated that over a 20-year period, U.S. companies that adopted green building standards saved a collective $6.7 billion in energy costs, not to mention the knock-on health benefits from reducing pollution, including averting hundreds of premature deaths and tens of thousands of missed workdays, which generated an additional $4 billion in savings.

Other Ways to Green Your Management

A Guide to Sustainability in Property Management (DRK Realty, Oct. 11, 2023)

Something as simple as improving the windows and natural light in your property can have big impacts on sustainability. Bigger windows mean more sunlight inside a unit, which cuts down on interior lighting and, therefore, energy bills. Better seals around each window will also prevent air from escaping in or out, which means less energy to heat or cool a unit.

Sustainable Property Management: A Guide (Tolj, Apr. 23, 2023)

Automated Building Systems (BAS) help to reduce overall energy usage, leading to a range of environmental benefits and promoting better health and happiness for building occupants. The advantages of automation include cost savings from lower energy usage and reduced waste. Moreover, automation significantly minimizes a building’s stress on the electrical grid.

Green is the New Gold – The Practices and Benefits of Sustainable Property Management (Payquad, Mar. 1, 2023)

Incorporating sustainable property management practices has positive financial benefits as well. By using fewer resources, these systems save money for property owners in the long run. Implementing sustainable features costs about 2% more on average; however, property owners end up saving between 14%-19% in operational costs (Rosencranz, 2022). This allows property managers to increase their profitability. Buildings with sustainable features generally have higher market value and generate greater returns.

Websites, Journals & Certification Programs

US Green Building Council — Committed to a prosperous and sustainable future for our nation through cost-efficient and energy-saving green buildings

Energy Star for Buildings and Plants — Created in 1992 by the EPA, the Energy Star program has since gone international and is one of the leading marks for energy efficiency in the world for consumer goods, homes and buildings

Sustainability — BOMA International's green resource page

Green REsource Council — The website for NAR's Green designation

LEED Rating Systems — The leading commercial building certification standard in the United States, sponsored by the US Green Building Council

eBooks & Other Resources

eBooks.realtor.org

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

The Green Building Bottom Line (eBook)

The Complete Idiot's Guide to Greening Your Business (eBook)

Conservation for Cities (eBook)

Green Buildings A to Z (eBook)

Green Business Practices for Dummies® (eBook)

Healthy Buildings (eBook, Audiobook)

Land Use Law for Sustainable Development (eBook)

Reinventing Green Building (eBook)

Smart Green: How to Implement Sustainable Business Practices in Any Industry—And Make Money (eBook)

Sustainable Energy Systems in Architectural Design (eBook)

Sustainable Facilities (eBook)

Sustainable Property Development (eBook)

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

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

Books, Videos, Research Reports & More

As a member benefit, the following resources and more are available for loan through the NAR Library. Items will be mailed directly to you or made available for pickup at the REALTOR® Building in Chicago.

A Practical Guide to Green Real Estate Management (Chicago: IREM, 2009) NA 2542 K6

Lease Guide: Guide to Writing a Commercial Real Estate Lease including Green Lease Language (Chicago: BOMA International, 2008) HD 1384 T23

Green Retail: Selected Readings, Oct. 2007 (Washington DC: Urban Land Institute, 2007) NA6230 Ur1g

Green Buildings: Selected References, September 2006 (Washington DC: Urban Land Institute, 2006) NAC 250 Ur1gb

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

Routledge Handbook of Sustainable Real Estate (Abingdon: Routledge, 2018) HD 1390.R684 2018

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