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Commercial Real Estate Shift

By PowerHouse Growers | Green Real Estate, Most Popular, Urban Design

Commercial real estate investors are making a shift in response to the increased market size of the green building industry. Consumers and investors are beginning to care more about the impact our buildings have on human health and our environment than ever before.

To illustrate the shift that’s taking place, Richard Branson has gone as far as saying he won’t do business and won’t accept money from investors that are ignoring climate change or don’t believe it’s a problem.

Mr. Branson’s sentiment echos an aligned shift that’s occurring as well in the commercial real estate market. Here is how our increased awareness regarding human health and environmental impacts is affecting the landscape of commercial real estate investing.

Environmental Design

Increasingly, commercial buildings are being designed for better efficiency in energy consumption so as to reduce the impact that these structures have on the environment. The benchmarks of high-performance design are being achieved by real estate developers around the world, thanks to the vision and leadership of organizations like the World Green Building Council – and its national affiliates like the US Green Building Council and the Canada Green Building Council. Their LEED certification standards have been a positive motivator in encouraging the construction industry to reflect on their typical practices and determine the true impact they have on their surroundings.

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Improved environmental impact and resource consumption from LEED certified buildings. Image via USGBC.

Design for Human Health

Besides shifting to a more ecologically-conscious way of developing commercial real estate, there is a definite move towards the consideration that our buildings can have a serious impact on human health – either negative or positive. This is becoming a major focus of green building proponents as important research on “sick buildings” has given us the tools to make appropriate adjustments. After all, its humans who are living and working in these buildings, spending the majority of their lives under the overhead lighting and inhaling the indoor air. Buildings can now be designed to improve human health through the installation of full spectrum lighting, the use of ventilation technologies, and the installation of living walls and green roofs. Positive impacts have included everything from improved psychology, to reduced stress and anxiety, to decreased respiratory problems. Additionally, these improvements to human health are also creating a more productive and happy indoor environment.

Improving ROI

Because green buildings are becoming increasingly more prevalent and in-demand, the value of these high-performance structures is increasing as long-term commercial real estate investments. The efficiency of these ecologically-designed buildings is appealing to many developers concerned about the increase in operating expenses we’re sure to see over time as our resource costs increase. Higher occupancy rates are also expected and will continue to increas as tenants are actively seeking out the benefits that green buildings offer.

Commercial Real Estate’s Future

Commercial real estate investors as well as real estate agents are poised to position themselves in this growing market. By continuing their education on the green building sector, consumer demands, and overall trends, these experts can establish themselves within the market and offer true service to those who are willing to pay for “green”. The awareness surrounding the benefits of green buildings will only continue to increase which means further opportunity for experts to grow their customer base.

Another important consideration for commercial real estate investors in the increase in available incentives and rebates through various cities to promote green design in new construction. These incentives further support the business case for entering the green building market which is expected to increase to a global market value of $254 billion by 2020.

Feature Image: The Medical Education Building at the University of California – Irvine, a LEED Platinum certified building. Image via Mithun.com

About The Author

PowerHouse Growers
PowerHouse Growers teaches you how to sustainably integrate urban agriculture into your cities, businesses, and homes. We provide clear solutions and benefits for better health, increased productivity, and lower environmental impact. By connecting you with experts, we bring awareness to solutions that may not be top of mind.