Llenrock Group
Is it really worth it to protect the environment? Well, companies of all shapes and sizes think so, including Dell, IBM and HSBC Holdings,I'm assuming that most people, if given the choice, would go green if it had no negative impact on their bottom line. We all live on Earth so it makes sense that we would not want it to deteriorate, but sometimes it's just not cost efficient to reduce our footprint. So, how does this affect commercial real estate? I wasn't totally sure at first, or necessarily interested, until I read an article published by National Real Estate Investor. The large costs associated with going green deter many professionals working in the commercial real estate realm from investing in green initiatives. The costs can be high, but have luckily been decreasing; and, in reality, whether or not you want to go green will probably not be a choice in a few years.
The “sticker shock” for going green is becoming less terrifying as the years pass, according to some in the hotel trade. However, not everyone agrees. The costsfor the materials and construction have dropped, but the cost of hiring a consultant to meet LEED certification standards is still high. “Gene Singleton, president of Summit Associates, LLCof Raleigh. N.C., a hotel developer, said that when his company built a $24 million project, it spent $240,000 on green measures before deciding to go with a LEED program, but they still needed a LEED consultant.” Although the cost may still be high, going green can pay off in the end. Those commercial real estate properties, which have enabled energy saving practices, can see large operating savings.
In addition, having a property that is “green” or LEED certified is a huge selling point. We are living in a time where consumers are looking for conservation efforts when they are in the market to purchase or lease a property. There are cost issues, and there are long-run benefits, but despite the pros and cons, green design and standards may be inevitable. Governmental policies will most likely be set in place to dictate exactly what is acceptable and what is not. Currently, “more than 24 states have a climate policy and more than 1,100 city mayors have signed up for greenhouse gas reduction programs.” Going green with your commercial properties can also really help the resale value. More and more we are seeing an influx of green initiatives, and having a green building is definitely a plus.
The cost of going green is high, but the cost of not doing it might be even higher down the road. We all have our priorities, and maybe the circumstances do not necessitate going green right now, but it's hard to say what the future holds. I think it is safe to say, however, that priorities are always changing and we are definitely moving towards a “greener” future.
Going green, is it really even an option anymore?