Can Real Estate Be “Green” and Profitable?

Today, the word “green” is more synonymous with the environmental movement rather than lack of experience or money.

Despite the surge of the “new” meaning of the word, many industries are still slow to embrace it in their fields. One of those industries is the real estate sector.

Can real estate promote sustainability and be profitable?

The short answer is yes.

Facts

As cities around the nation start to green their construction codes, more consumers are taking the important responsibility to make sure their property is healthy and energy-efficient by providing better indoor air quality with lighting and temperature controls.

All kinds of commercial and home properties can be built (or refurbished) with green features. By doing so, property owners help their real estate meet the new energy conservation laws being implemented in the U.S.

Benefits

Green property delivers superior finance returns and market performance. A sustainable property generally generates energy savings of up to 30 percent or even more.

Although constructing a green property is usually 2 percent higher to make than typical property, an experienced (and willing) contractor can build for a similar cost of a traditional construction.

New data implies that green property frequently delivers superior finance returns and market performance. Data developed by CoStar Group — one of the premiere commercial real estate info services — confirms that green-authorized properties often lead directly to superior occupancy levels, rental rates, and sales costs.

As companies become more concerned about environmental issues (and their corporate images), tenants will be getting less interested in non-green properties. These energy-inefficient properties will depreciate more quickly, and landlords will find it harder to raise rents where tenants are already paying higher energy costs.

Conclusion

Managing real estate sustainably will enhance returns and help contribute to the enhancement of the big picture with the added gain of a moral duty being fulfilled.

Anyone involved in real estate has a clear duty to understand these issues, their implications, and their effect on property values and society.