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5 Reasons Why Going Green is Growing

June 27th, 2007 11:12 AM by Sabrina Simpson

Daily Real Estate News | June 26, 2007

5 Reasons Why Going Green is Growing
More than that 41 percent of the 300 U.S. real estate investment trusts (REITs) are actively pursuing energy efficiency and green building upgrades. What's more, another 27 percent plan to do so, according to an analysis by Progressive Investor, a monthly newsletter that guides investors and advisers toward sustainable investments.

Progressive Investor says the following is driving the trend:

  • Rising energy and water costs. Developers and building owners are feeling the crunch of high energy and water costs, which, according to the Building Owners and Managers Association, constitutes 28 percent of operating costs for downtown office properties and 30.4 percent for suburban properties. They see the quick payback and cost savings in energy efficiency and other green building upgrades.
  • Building green no longer costs more. Turner Construction's 2005 Green Building Market Barometer shows it costs a mere 0.8 percent more for basic Leadership in Energy and Environmental Design (LEED) certification, easily recouped through lower operating costs.
  • Client preference. More clients and tenants are showing a preference for green buildings, which have been proven to increase productivity, retain employees, and lower absenteeism. The combination of reduced operating costs and more satisfied occupants translates into 3.5 percent higher occupancy rates, 3 percent higher rents, and a 7.5 percent increase in building value, says the McGraw-Hill 2006 SmartMarket Report.
  • Attention-getting. Corporations with sustainable business policies are building highly visible green headquarters including Bank of America, Toyota, Goldman Sachs, Hearst, IBM, JPMorgan Chase, and Herman Miller. The Freedom Tower, which replaces the World Trade Center, will be LEED-certified.
  • Increasing mandates. Nine states and 40-plus municipalities have passed legislation mandating LEED-certified buildings.

— REALTOR® Magazine Online

Posted in:General
Posted by Sabrina Simpson on June 27th, 2007 11:12 AM