Green building has been gaining momentum over the past two decades, and greater focus on climate risk and ESG initiatives are providing additional tailwinds for sustainable initiatives. However, results from the latest WMRE research show there remains some reluctance in moving to a greener commercial real estate market.
A healthy majority of survey respondents, 73 percent, said they currently have implemented sustainability strategies at least at some of the properties they own and/or manage. “The industry has definitely progressed over the last 10 to 15 years around sustainability,” says Eric Tilden, PE, LEED AP, director of energy and sustainability at Cushman & Wakefield. More owners are not only working to improve sustainability at the property level, but they are more focused on the impact of energy consumption and carbon emissions on climate risk. A growing number of institutional owners also are setting ambitious net zero carbon goals. That said, the industry does have a long way to go in order to meet goals outlined by The Paris Agreement, which calls for limiting global temperature increases this century to less than 2 degrees Celsius, he says.
“While I would love to see a higher number, that 73 percent number is not far off from what I would expect in terms of industry adoption,” adds Josh Richards, director of asset services at Transwestern. One reason that number is not higher is that some smaller owners are less motivated, or even less able, to invest in sustainability due to the incremental cost. Meanwhile, other property owners are more “unintentionally green” than they think they are, he says. Larger municipalities are increasingly embedding components of LEED standards into new building codes. So, any developer that is building to code is building to a more sustainable level than they did 20 to 30 years ago, and they may not even realize it, notes Richards.
Survey methodology: The WMRE research report on sustainability was conducted via an online survey distributed to WMRE readers between October 12 through October 21, 2021. The survey results are based on responses from 224 participants. Respondents represent a cross-section of different roles in the commercial real estate industry, including investors, building owners and managers, developers, lenders, brokers and financial advisors. A variety of job titles and positions are represented within the respondent base with the largest being the C-suite at 34 percent.