- Leads CP Green, the green brokerage program of Capital Pacific, a national commercial real estate firm with sales of $7.13 billion in 49 states across the U.S.
- A leader and frequent speaker for ICSC RetailGreen, the leading retail-focused green real estate conference in the U.S.
- Co-chair of the 2013 ICSC RetailGreen Conference and member of the executive committee of the US Green Building Council's Bay Bridge branch.
- Advisor to Cole Valley Partners, a boutique real estate investment and consulting firm that prioritizes investing in and repositioning assets into green buildings.
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Navigating Green Real Estate for Owners and Investors
- Buildings consume 40 percent of the energy and almost 80 of the electricity used in the United States.
- As an owner or investor, consider the amount of power and water being used to operate commercial buildings. Utility costs are fluctuating and this creates risks for building owners and tenants.
There are many things that could be done to improve the energy performance of a building. Often owners struggle with the "split incentive" of paying for an upgrade that a tenant benefits from (when the tenant is responsible for paying utilities). However a strip center owner could look at a common area expense that does impact their bottom line, such as parking lot lighting. On top of the utility costs of lighting, there are labor costs associated with replacing expired lamps. By switching to a more efficient parking lot fixture, the owner can save on both utility and maintenance costs, with a very quick payback on the investment.
Often, there's just no sense of urgency or awareness about simple changes that can have a financial impact, not to mention make the parking lot safer for shoppers, more attractive and more inviting.
- Making buildings more efficient can be complex, and doing so requires the cooperation of both the landlords and the tenants.
- Anyone who is at the forefront of high performance building would say that the most important first step is to understand how your property is performing against comparable properties, and/or other properties in the portfolio.
There is a great opportunity to improve the efficiency of buildings, but a lot hinges on who is paying for the utilities. Depending on how the lease is structured, a building owner might be able to quickly improve a building's financials. However, if the tenants pay for utilities, there is a need for creativity in order to find ways to help share both the upfront costs and the savings achieved from better building performance.
- There is a lack of understanding in the marketplace about the variety of building rating systems.
Rating systems for buildings can help us determine whether a building is efficient or not. But because there are multiple rating systems that work in different ways, it can be very hard for investors to understand which buildings to invest in. And it's also challenging for developers and building owners to decide which rating system to pursue, and whether it will result in more value for them.
- There is a growing patchwork of energy efficiency regulations emerging across the country in cities and states.
- Owners of larger real estate portfolios are finding that their properties are affected by regulations that vary from jurisdiction to jurisdiction. This makes it very difficult to apply a single solution across a portfolio, because a solution that may meet a regulation in one city will not satisfy the regulatory environment in another.
- Some of the players in the commercial real estate market are unfamiliar with high performance buildings, and that makes the market inefficient.
Leasing and sales brokers, lenders and appraisers all have a role in setting the valuation of properties. But in that process, building efficiency is not commonly taken into account. With all other variables being equal, a high-performing building should be worth more in the marketplace because it is less expensive to operate. But that is not necessarily the case.