Making Your Real Estate Green ? Cassidy Turley FHO NewsWatch

ByJonathan Keefe, Senior Vice President

Sustainability continues to be a hot topic with almost everyone claiming to be some shade of green, which raises the question, ?What does sustainability really mean?? In the world of commercial real estate, sustainability can be broadly categorized into two areas ? construction and operations. ??

1. Construction ? New sustainable construction, tenant fit-outs and major building renovation projects tend to receive the most visibility. In construction related sustainability, the emphasis is on the environmental impact of building the site and interior physical space, as well as the supporting equipment and fixtures. Sustainable construction focuses especially on the use of high-density or urban sites, promoting energy and water efficiency as well as using local and/or renewable materials.

2. Operations ? More recently sustainable operations are receiving greater attention. Rather than focus on environmental quality during construction, companies are looking to ?green? their operations through solutions in transportation and commuting; recycling and waste management; and achieving increased utility efficiency.

However, green construction and operations are just two legs of the sustainability stool ? the third is actual demand for the space, culminating in a lease. Today, tenants have a growing desire (and in some cases, requirement) to be in green spaces. And landlords, especially large public ones, are increasingly looking to be green and share some of the same sustainability concerns as the tenants.? Learn more about green leasing in ?What Color is Your Lease?

So what drives tenants and landlords to demand sustainability in their real estate leasing programs? By and large it is the triple bottom line: People-Planet-Profit. Tenants need their workforce (People) to be healthy and productive. They want to maximize their bottom line (Profit) and they need a secure and stable place in which to carry out their enterprise (Planet).? A company?s real estate is where the three Ps tend to converge so space use has recently found itself the central focus of corporate green programs.?

More specifically, here are some of the results landlords and tenants often enjoy from their sustainability efforts.

Tenant Benefits
- Lower operating expenses
- Higher worker productivity
- Reduced absenteeism
- Fewer sick days used
- Increased retail sales
- Improved employee retention and attraction
- Positive brand and image
- Compliance

Landlord Benefits
- Lower vacancy
- Higher rents
- Improved tenant satisfaction and retention
- Increased building value
- Easier financing/refinancing
- Lower risk
- Positive brand and image
- Compliance

A properly structured lease can enable both tenants and landlords to move towards their sustainability goals. With both parties motivated by the benefits listed above, sustainable practices can be incorporated into many spaces, and stipulated in the terms of the lease.

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Source: http://fhopartners.wordpress.com/2012/03/28/making-your-real-estate-green/

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