Today I’m going to discuss my latest piece of thought leadership on the topic of sustainable investment. For occupiers, sustainable real estate practices can lower operating costs. Less energy used equals cost savings, pure and simple. Making real estate facilities green can also go a long way to enhancing brand appeal. It demonstrates to the world the brand’s commitment to environmental responsibility.
The value proposition of sustainability for building owners hasn’t always been clear. This latest thought leadership discussion focuses on the investment drivers for sustainable real state. By surveying leading owners and investment managers across North America I set out to understand the motivation for owning and developing green buildings and how sustainability impacts real estate investment decisions. I conducted one-on-one interviews with 25 top property owners and managers in North America and their view points across four main categories are interesting. I learned that the demand factors for sustainable buildings are driving increased momentum among the investment community. These factors include investors, stakeholders, occupiers, tenants and industry best practice. As a result many of the owners we interviewed have implemented formal sustainability policies and owners who don’t have policies indicated that the absence of a written statement does not mean sustainability is not a factor in their investment decisions.
Our interviews also revealed the strong opinion that sustainability has a positive correlation to property value. Investors saw increased rents in their sustainable buildings. Using research previously conducted by my colleagues I compared the perspective on sustainability in North America to Europe. I learned that greater emphasis is placed on sustainability across in Europe leaving me to wonder how much growth is yet to come here in the states. Most of the investment professionals interviewed had clear opinions on sustainability and the value proposition of LEED certification. Some were far along in their development of sustainability policies and others were just beginning. But one thing is clear from my report is that the sustainability performance of a property is a factor that should not be ignored for anyone who wants to add value to their real estate portfolios.
To learn more about the role this critical issue plays in a real estate investment please contact me and I can share it with you.