As evidence mounts that energy and sustainability programs are good for business as well as for the environment, the vast majority of commercial real estate owners have spent money on green strategies in the past year, but most have avoided making large capital investments requiring financing, according to the latest report from Jones Lang LaSalle.
“Since the emergence of green buildings a decade or more ago, our understanding of sustainable construction and building management has evolved quite significantly,” observes Franz Jenowein, Director, Energy & Sustainability Services, in the report’s lead editorial. “In parallel with the rise of significant volumes of sustainable building investments, we have seen the introduction of benchmarking tools at enterprise levels. They are helping to track the impact that sustainability strategies are having on property companies and to what extent they are following their commitments in greening their assets.”
More capital is available for energy retrofits and renewable energy installations today than in recent years, but most owners have avoided financing options, focusing on self-financed projects that can demonstrate a direct financial payback, according to the Jones Lang LaSalle report.
“Owners tend to favour moderately priced projects such as lighting retrofits and temperature controls, rather than expensive HVAC upgrades that would save more energy but would be less visible to tenants,” said Dan Probst, Chairman of Energy and Sustainability Services at Jones Lang LaSalle. “They need to know that every dollar they spend produces a financial return, not just in energy savings but also in terms of ROI and building value.”
In Jones Lang LaSalle’s Global Sustainability Perspective, an article entitled “Building Energy Retrofit - Owners Need Convincing, Not Just Financing” notes that most investment owners do not expect energy improvements to result in higher rent, but they do expect to attract more tenants, thus improving return on investment and building value. While owners have focused primarily on moderate cost improvements, those that analyse the cost and financial payback of a whole-building energy retrofit, and can take advantage of tax incentives, may find more extensive retrofits make financial sense as well.
Also in Global Sustainability Perspective are articles on: