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For those who were convinced that green building was merely a passing fad, a new survey by the National Real Estate Investor and its sister publications may prove otherwise. The survey reveals that not only is green building gaining momentum as a commercial real estate strategy, but it is also vying for status as the new industry standard.
In fact, the exclusive survey, which drew responses from 218 corporate users and 166 developers of commercial real estate, reveals that 52% of corporate respondents and 39% of developer respondents currently own, manage or lease at least some “green” properties.
Even more compelling is the fact that the focus on sustainable real estate is clearly on the rise with 84% of corporate users and 77% of developers expecting to own, manage or lease at least some green properties five years from now.
Survey results support the premise that corporations and developers are embracing green building practices. Respondents expect that green building ownership and management will increase dramatically in just a few short years. Corporate users anticipate that the amount of green facilities they own or lease will more than double from 9% to 21% in the next five years. Developers also expect the volume of green properties in their portfolios to take a similar jump from 9% to 20% by 2012.
Respondents are most likely to be involved in office and retail. Among developers, 55% own or manage retail, followed by office (48%) and mixed-use and hospitality (35% each). On the corporate side, 51% of respondents own or lease office space, followed by industrial (42%) and retail (25%).
Corporations ranging from Bank of America to Best Buy are incorporating green building as part of their real estate strategies, and developers are clearly responding to the rising demand for these facilities.
The desire to cut energy costs is the main force pushing green building into the mainstream. Four out of five respondents indicate energy efficiency is important to their company when selecting, acquiring or developing a green building.
When asked what the most important factors are when choosing green buildings to buy or lease, corporate users most frequently cite energy efficiency (81%) followed by water savings (53%) and indoor environmental quality (50%). Corporate users believe the most significant benefits of green building design are lower energy costs (78%) and that it has a low impact on the environment (75%).  Most developers also believe lower operating costs are the greatest benefit of green building design (79%), while being environmentally friendly also rated high (74%). The ability to differentiate in marketing followed at 46%.
Indeed, most corporate users say they would be willing to pay more for LEED-certified buildings, with more than one-third (39%) willing to pay 1% to 2% more; 27% would pay 3% to 4% more; and 23% would pay 5% to 9% more. Another 8% say they would even be willing to pay 10% or higher. The U.S. Green Building Council contends that green buildings have higher lease rates and occupants are healthier and more productive. The USGBC states that the average return on investment in a green building is 20%.

With the potential of the definition of “Class-A office space” meaning the building must be green within the next three to five years developers are now looking at green buildings as the new standard.  Green building practices are clearly becoming entrenched in the commercial real estate universe. In fact, nearly half of respondents — 51% of developers and 47% of corporate users — believe that green building is not only a long-term phenomenon, but also that green building requirements will become part of future building codes.

Now is an excellent time to sell or upgrade your industrial property. National and local trends are indicate that with a diminishing supply of developable industrial land and with the global thirst for consumer based goods in countries like China and India, end users, developers and institutional buyers are entering the industrial market once again with strong momentum.
I anticipate vacancy rates to fall gradually by the end of second quarter in 2009 and asking industrial leasing rates to climb at a steady pace. With the rising cost of energy and current fuel prices, I believe that rail served industrial land will be of extreme value for our national and local transportation needs. In addition, I foresee technology and energy businesses continuing to grow and they will require more industrial space in Las Vegas.
Our strong brokerage network and client relationships offers access to such affordable rail served and industrial land in Nevada either for immediate build- to- suit or for a long term investment hold.

Contact Art Farmanali, SIOR for more information: 702-363-7600