Top 2014 Green Trends That Enhance Building Value
As we enter 2014, going green, sustainability and LEED certifications, rather than the exception, have become the norm. We’ve come a long way from when everyone thought going green was the right thing to do, even if we didn’t quite know what to do or how to do it.
In the ensuing years, a number of influences converged. Corporations adopted sustainability policies. Corporate real estate and HR executives documented the productivity and employee retention benefits of those policies. Building owners successfully and profitably marketed to and retained tenants seeking green spaces. Federal, state and local incentive programs were initiated, as well as local laws requiring benchmarking of energy and water use. Lastly is the growing body of evidence that green increases property value.
As a commercial real estate appraiser, monitoring green trends and sustainability issues are part of the complex process of valuing green real estate. I foresee 2014 as a year when property owners and tenants will be taking new steps forward to enhance sustainability.
What are those trends? For one, I anticipate greater focus on greening existing buildings with retrofits and renovations of New York City’s vast stock of older commercial buildings.
New laws will necessitate some of these projects, but the improving economy and the need of property owners to have a competitive that goes beyond asking rents and location, will be a compelling force. The next trend I foresee is embracing the goal of becoming a zero energy or net zero energy building which has zero energy consumption and zero carbon emissions and relies on exceptional energy conservation and then on-site renewables to meet all of its heating, cooling and electricity needs.
It’s a lofty, complex, expensive goal requiring collecting energy, often through solar or wind power, ultimately matching demand with production, as well as state-of-the-art HVAC and super-efficient energy usage. New construction is most likely to take advantage of technologies that make zero energy buildings realistic.
It will be a long time coming–the U.S. has set a target of net-zero-energy for all new commercial buildings by 2030–but they have already moved from being perceived as unachievable to feasible.
The next trend that continues to grow is energy efficiency including monitoring, benchmarking, retrofits, consumption reduction, use of alternative energy sources (if the Empire State Building can purchase 100% wind power produced electricity, so can you); and new technologies. Solar power will continue to make inroads with lower-rise, flat roof buildings.
Continuing with energy efficiency, LEDs (light-emitting diodes), long considered too expensive, are becoming a game-changing source for commercial buildings, gaining significant ground against fluorescent and incandescent lighting. LEDs are highly energy efficient, have a very long life span and are now available in white light. They are one of the solid state lighting systems (SSL technologies) that the Department of Energy is on record as saying have the potential to reduce U.S. energy usage by nearly one half and contribute significantly to our nation’s climate change solutions.
Climate change brings us to a trend that is being addressed with some urgency–water conservation. As climate changes impact the amount of rainfall and, thus, water supply, there is anticipation of a fresh water crisis and critical interest in water conservation including the recycling of grey water.
The last trend may seem removed from green, but isn’t as it increases efficiency in building and property management. It is Internet-based cloud computing. This enables users to access information from any computing device–PCs, Macs, smart phones and tablets–from anywhere with Internet connectivity.
About the Author
As president of the Metropolitan New York Chapter of the Appraisal Institute, one of the global organization’s largest and most active chapters, Steven Schleider is responsible for overseeing all aspects of the chapter’s programs, continuing education classes and seminar schedules, special events, finance and marketing communications. All have the goal of advancing the industry knowledge and heighten the profile of appraisers with regard to professionalism and the practice of property economics and valuation.
The majority of the chapter’s members are practicing real estate appraisers and property analysts who provide valuation services to mortgage lenders, financial institutions, government agencies, attorneys and property owners. Those who are at the highest level of the industry hold MAI or SRA designations, obtained only after a rigorous program of education and experience, and long recognized as a mark of excellence in the field.
Steven J. Schleider, MAI, LEED-AP BD + C
Metropolitan Valuation Services
Real Estate Consulting and Appraisal
44 East 32nd Street
New York, NY 10016