Creating a Sustainable Future: Green Trends To Consider in Commercial Real Estate
As businesses grow across the Inland Empire, the need for sustainable and green commercial real estate (CRE) will also increase. The Quadrennial Technology Review from the Department of Energy reveals the true impact CRE has on the environment and climate change. The commercial real estate sector accounts for about 76% of electrical use and 40% of associated greenhouse gas emissions in the U.S. Together, greenhouse gases, water abstraction and air pollutants account for about 90% of the commercial real estate environmental impact costs— mainly due to the high cost of extracting water from natural resources. These costs create a financial roadblock for CRE investors.
While some buildings continue to be developed without the environment in mind, commercial real estate is quickly becoming greener in an effort to reduce the sector's impact on the environment. These changes are speared by government regulations set to finalize in coming years. Out of the variety of ways the industry is working to reduce its carbon footprint, there are three specific trends leading towards a sustainable future.
Solar-Powered Energy
Solar power investments are a top green trend within the commercial real estate industry. As solar power becomes more affordable, building owners are making sure new properties are solar generated. This cuts back on overhead costs of powering the buildings and is better for the environment than traditional energy sources.
Architects, engineers, and contractors are now of the opinion that net-zero buildings are achievable in the future by using solar energy and other clean forms of energy. The U.S. Energy Information Agency (EIA) projects that solar installations in 2020 and 2021 (approximately 13 GWac of utility-scale solar power and 4 GWac of small solar power) will continue to grow. Solar energy is expected to make up 39% of clean energy by the end of 2021.
In Riverside specifically, the goal of Riverside's municipal electric and water utilities was to obtain 33% of electricity from renewable sources by 2020. This year, Riverside has dedicated itself to reducing potable water usage and increasing renewable energy.
Space Design and Integration
Productive workspaces are more about the function of available space rather than the excess of space. Excess space that serves little function contributes to higher costs including extra energy to heat or cool the space, as well as to light, clean and fill the space with décor. New green commercial real estate properties are being designed with efficient space usage in mind. The environments are designed to not only cut down on overhead costs, but to also drive productivity in the workplace.
In addition to functional spaces, new environmentally friendly CRE property development is focused on providing adaptable spaces for the work-from-home hybrid model that many companies are adopting. While traditional workspaces, such as offices and conference rooms, are still needed, flex spaces for game rooms and hangout spaces are in demand.
Human and Eco-Friendly Building Materials
When it comes to green commercial real estate, building materials contribute to cost and sustainability. Traditional paint, drywall, furniture and carpeting can all contain volatile organic compounds (VOCs) that can be harmful to the environment. As a result, builders are turning to low-VOC products and other alternatives.
Builders are also incorporating architectural aluminum grills, self-mending concrete, and switchable smart glass. Architectural aluminum grills allow for airflow from the outside to be harnessed and controlled to help lower heating and cooling costs. Switchable smart glass can inhibit UV rays and deflect the heat of the sun from entering the workspace, providing for more energy-efficient spaces. Self-mending concrete contains bacteria that grow and bind into cracks and fissures in the concrete, creating more impermeability and longevity. While these eco-friendly products may cost more initially, they present long-term savings for investors considering the environmental impact of commercial real estate.
Looking Ahead
These are just a few of the trends helping to move the CRE industry towards a more sustainable future. Governmental regulations are beginning to lean towards requiring eco trends to be permanent. While the initial efforts to be sustainable can be time-consuming and costly, the results are worth it. Compared to energy-inefficient properties, new green buildings are expected to emit 40% less CO2, consume 40% less water, and up to 50% less energy.
Builders and investors are being met with the opportunity to help companies increase profitability while reducing their eco footprint. With today's market increasingly demanding environmentally-friendly products and workplaces, the profitability of green commercial real estate development will only grow.
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Contact Team Stance today to learn about available sustainable properties and other opportunities within the Inland Empire.
