The Importance of Sustainability in Commercial Real Estate

Sustainability has become a buzzword in the real estate industry over the last few years. More and more real estate professionals are recognizing the importance of sustainable practices in commercial real estate. The impact of real estate on the environment cannot be ignored, and investors and property owners need to take responsibility for creating more sustainable buildings. In this blog, we will discuss the importance of sustainability in commercial real estate, the benefits it brings, and what investors and property owners can do to make their buildings more sustainable.

1. Sustainable buildings cut down on operating costs

Sustainable buildings offer long-term cost savings for investors and property owners. They consume less energy, water, and other resources, reducing operating costs over time. By investing in sustainable systems, owners can cut down on the cost of energy, water, and waste removal. For example, a building with an efficient HVAC system will require less energy to heat and cool, and an optimized water management system can reduce water consumption by as much as 50%.

2. Attract better tenants

Tenants are becoming more environmentally conscious and are more likely to rent a building that aligns with their values. Sustainable buildings not only attract tenants but also retain them for longer periods. An energy-efficient building provides more comfortable living spaces with better air quality, which results in healthy and productive employees. Improved indoor air quality is a significant benefit in office spaces, where sick building syndrome can lead to lost productivity, absenteeism, and higher health care costs.

3. Sustainability is good for the environment

Sustainable commercial buildings have a reduced ecological footprint on the environment. Buildings consume approximately 40% of the energy used in the United States, contributing significantly to greenhouse gas emissions. By adopting sustainable practices, property owners can reduce their carbon footprint, minimize waste production, and conserve natural resources. For instance, choosing to install solar panels can contribute to the reduction of carbon emissions and make a building more sustainable.

4. Increase the value of your property

Sustainable buildings have a potential increase in value compared to traditional buildings. Investors are interested in the long-term cost savings that sustainable buildings offer, which increases the overall value of the property. LEED certified buildings, for example, command a premium of about 5% to 7% compared to traditional buildings, according to a study by the University of Notre Dame. Additionally, a more sustainable building can help differentiate a property in a crowded market, helping it attract more investors.

5. Government incentives and regulations

Governments worldwide are encouraging sustainable practices in commercial real estate through incentives, regulations, and certifications. For example, many states offer tax benefits or rebates for buildings that adopt renewable energy technologies or achieve energy efficiency certifications. Governments have also introduced building codes and set standards for energy efficiency in buildings. By adopting sustainable practices, owners can take advantage of these incentives, central tax benefits, and avoid penalties for non-compliance.

Conclusion:

The benefits of sustainability in commercial real estate cannot be understated. Besides the cost reduction, environmental impact, and tenant retention benefits, sustainable buildings also have a positive impact on the community. With an increasing number of investors and property owners seeking eco-friendly options, sustainability is an excellent investment opportunity. Through certifications like the LEED, BREEAM, or WELL certification, owners can differentiate themselves in the market and gain a competitive advantage. Governments are also providing incentives to owners to improve sustainability, making it a win-win for the community and the environment. As the shift towards sustainability increases, making your building more sustainable will bring a positive impact to the environment and the bottom line.