These are excerpts from a roundtable discussion sponsored by Incisive Media and Williams Real Estate. The full text will appear in the December issue of Real Estate New York magazine.
NEW YORK CITY-Eighteen months ago, recalled construction attorney Kenneth Block, discussions about green building tended to revolve around the question of whether the cost and effort were justified. Now, said a panel of experts Monday evening, everyone from tenants to lenders to government is making it all but essential.
"The state of the art will be green," said Block, partner at Tannenbaum Helpern Syracuse & Hirschtritt LLP. "There's no question about that." Block pointed out that as part of their more stringent standards, lenders will insist on the-state-of-the-art when it comes to financing new construction. Moreover, government is leading the way in mandating green standards, he added.
Noting that the crux of the issue for commercial real estate is cost effectiveness, moderator Robert Freedman said that owners and developers, "no matter how enlightened they are," are still responsible to the realities of the marketplace. In a business of ROI and payback thresholds, "Can green be sold effectively in the context of this marketplace?" asked Freedman, president and CEO of Williams Real Estate, in kicking off the panel discussion.
Tenant demand can be one factor in answering this question affirmatively. "Is there going to be a green market at all? Actually, I think there's going to be more of a green market" because owners will need to differentiate their buildings as vacancy rates slip and tenants have more choices, said Nora Fay, principal of Lehr Construction. Freedman commented, "Enlightened tenants can legislate enlightened practices."
Catherine Barton, corporate director of business development at Green Depot, cited municipalities that have implemented incentive programs to encourage sustainable real estate, from the Long Island communities of Babylon and Hempstead to New York City, where the Bloomberg administration rolled out its PlaNYC in the spring of 2007. Within government buildings, too, the green movement has taken hold. Panelist Emily Baker, regional administrator of the US General Services Administration, cited a study showing "real results" in 12 of the sustainable buildings within GSA's purview.
Additionally, going green does not always entail a cost premium. Andrew Padian, senior housing specialist at Steve Winter Associates, said there are many no-cost steps that building owners can take. "This is not about cutting-edge technology," said Padian. "This is about things that are 20, 30 or 40 years old and most people are familiar with."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
