Investment trusts and companies which are trying to make sure that they increase their properties which are classified as green for building efficiency performance have increased over the years. There is also an increasing trend among stakeholders and institutional investors to find some value in making investments for efficient buildings, as the push for green buildings already took off across industries.
Real estate investment trusts are turning to the Leadership in Energy and Environmental Design (LEED) program to establish credentials for building stocks. More than a third of real estate investment trusts across the county are seeking LEED certification or certified buildings.
Buildings account for 60% of global greenhouse gas emissions and companies must ensure that they address building efficiency as they move toward corporate sustainability. Investors are aware that they can realize a premium in terms of occupancy and return on investment by concentrating on green initiatives.
It is interesting to note that, despite the downturn, interest in green investments remains high. Investors have considered the long-term practicality of building efficiency investments, and likewise extended the pursuit of opportunities for sustainability. Energy efficiency is a hot topic conversation among building owners and occupiers alike.
Occupants are seeking ways to lease building which have LEED certifications, and therefore high building efficiency rates. This push shows that leaseholders are increasingly interested in operating their businesses in an efficient manner. Tenants are becoming so much aware to insist that they would be occupying a green building that would have the corresponding certification as proof should the customers or employees seek for such.
The market has shown that tenants are willing to pay a premium to occupy space that is classified according to LEED standards. Likewise, owners are very much aware that they would be more likely to have a higher tenant retention resulting to higher rates should investments be made on building efficiency at the present.
Investors have noticed that efficient buildings and those that are upgraded tend to have lower operating costs, which would be a more cost-effective investment. When coupled with proactive, energy-conscious tenants, owning or investing in a 'green' building can be a smart decision.
As green buildings could cost as much as 5% more than the actual construction, such costs are absorbed through operational efficiencies within the first few years of the operation. Since the industry of the real estate investment trust has introduced their Leader in the Light Program in 2005, it has been also actively involved in pursuing building efficiency.
Building efficiency standards will undoubtedly increase exponentially as society comes to demand an approach to energy efficiency and sustainability, and should be a priority issue to tackle in the boardroom at the present time.