(Carl Cronan is editor of Real Estate Florida.)
LAKE BUENA VISTA, FL-Commercial real estate owners who want to make their buildings more environmentally sustainable will need to act on their own accord for the time being, at least until local governments can reach some sort of commonality as to which green steps are appropriate, say panelists at this year's CoreNet Global Summit at Walt Disney World's Dolphin Resort. While municipalities are pressing developers to build green, experts point out that those rules tend to vary from one metropolis to the next.
At least 900 members of the US Conference of Mayors, predominantly from the nation's largest cities, have signed a Climate Protection Agreement aimed at reducing greenhouse gas emissions by 7% through 2012, based on a 1990 benchmark. However, ordinances set by those cities create potential confusion for office owners whose portfolios extend to several different markets, observed David Sykes, managing director of Cambridge, MA-based Remington Partners.
"They have been compiling all these best practices, but they don't have a lot of interest in working with the private sector" to implement them, Sykes told GlobeSt.com following a Monday afternoon panel discussion. While cities have advanced their own sustainability efforts over the past four years, state and federal government are only now taking a closer look at the issue, he said.
Industry groups such as the Building Owners and Managers Association and the National Association of Industrial and Office Properties, and even CoreNet Global to some extent, need to press the US Conference of Mayors on the subject, Sykes said. In the meantime, some state governments are already looking at their own mandates that could supersede those at the municipal level, he said.
R.J. Brennan, director of strategic workplace with Chicago-based IA Interior Architects, added that cities are pressing corporate office owners because those type of buildings are pegged as responsible for 38% of carbon dioxide emissions, exceeding both transportation and industries. "CRE is a huge target," he said.
Yet where government pressure should be enough to convince corporate real estate executives that they should pursue green office space, only 42% indicate that they are willing to pay a premium for it, according to a new survey jointly conducted by Jones Lang LaSalle and CoreNet Global. The survey results, released Monday morning during the Orlando summit, also note that 69% of more than 400 CRE executives surveyed say sustainability is a crucial issue to their real estate departments.
Michael Jordan, senior vice president of energy and sustainability services with Chicago-based JLL, said during a press teleconference that more companies are recognizing that the added costs of going green are being offset by savings from energy conservation and even higher worker productivity. Those added costs usually amount to only 1% to 5%, though some executives surveyed indicated they had no problem paying more if necessary, he noted.
Furthermore, Jordan predicted that companies are increasingly factoring sustainability into their expansion plans. "Companies are moving to those cities that have sustainable corporate environments," he said.
CoreNet Global, based in Atlanta, has 7,000 members managing $1.2 trillion worth of owned and leased commercial space around the globe. The Orlando summit concludes Tuesday.
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