Did you know that in the U.S., buildings account for around 40% of CO2 emissions, out-consuming both the transportation and industrial sector? Fortunately, the market is responding; apparently, green building sector is expanding, and the total of 70 countries report that at least 60% of their projects will be green by 2018. Taking these numbers into consideration, investors find green buildings to be quite compelling opportunities. If you are still not convinced of all the benefits that come with this rising trend, continue reading this article.
Researches show that buildings which are certified under the LEED rating system achieve price premiums ranging up to 30%. Additionally, as more and more people see green buildings as ideal places for their new homes, owners have the opportunity to command 4-5% higher rents and lease rates, which leads to the growth of NOI. Evidently, investing in a residential green property today is bound to bring you profit in the long run.
According to Energy Star, green office buildings are 30% more energy efficient than an average office building. In other words, green offices reduce expenses by more than $0.50 per square foot. Namely, buildings which have been LEED-certified have reported using between 15 and 40% less energy. For instance, energy storage solutions like Tesla Powerwall are becoming more and more popular; handy solar batteries like these have the power to store energy and keep it for use when needed.
Businesses located in green buildings claim that not only were they able to save a significant amount of money on an annual basis, they have also attracted a greater number of clients who insist on cooperating with sustainable businesses.
Eco-friendly buildings are unique for their protection against changing consumer preferences. What is more, LEED and Energy Star assets can insulate owners from new environmental and regulatory mandates and the ever-increasing energy prices. What this means is that by investing in green property, you will not longer have to worry about your energy bill gradually increasing on a monthly basis.
The growing popularity of sustainable buildings has received industry recognition. What is more, green buildings which have the tendency of rewarding transit-oriented development, smart growth and urban infill are known to have greater connection the local community. There are also a number of jurisdictions which provide incentives for eco-friendly construction, like offering expedited permitting.
In the end: have you devised a strategy yet?
Whether it is core, opportunistic or value-added strategy, if you strive for improved property performance, you will enjoy enhanced real estate returns. Market situation will definitely greatly influence your choice of strategy, however, if you seek for an ultimate approach that will give you a competitive edge, consider the following:
- Renovations and repositioning. In order to achieve optimal property performance, it is essential to invest in new technologies and building systems, as well as securing green certifications.
- Investigation. It is highly advisable to assess properties and find adequate opportunities for enhancement. Remember to incorporate environmental analysis and evaluate new operational practices and technologies.
- Existing assets. Research what is currently popular on the market and strive for products and services that will result in reduced costs and enhanced assets value.
- New developments. After receiving LEED certification and implementing green building construction practices, focus on raising market awareness and tenant interest, as well as cultivating the excitement of the community.
Green buildings are slowly but surely becoming a new market norm. Their numerous benefits, like reduced costs of occupancy, health and hygiene benefits, together with the overall profitability and satisfaction, represent a great investment opportunity for all people looking to support eco-friendly living.
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