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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.

Durango Village is a garden style office development located on Durango Drive and Patrick Lane in the Southwest. The project is strategically located equal distance from Southern Hills, San Martin and Spring Valley and offers easy access to the 215 Beltway. Durango Village is home to an array of professional business owners and now real estate owners. Seven of the 12 buildings have been sold to the likes of doctors, dentists, attorneys, insurance companies and more.

Durango Village was recently completed and is nearly sold out. The project offers 1,200 to 25,000 square feet of space for sale. Each building is delivered in grey shell condition, which means that you purchase a space that you can customize to your specifications. Each unit comes with covered parking and signage on the building as well as on the monument sign prominently located on Durango. The two-story building has common rest rooms on each floor and an elevator.

Just this March, Durango Village won the NAIOP Spotlight Award for best Small Office Building in Las Vegas.

For more information on the remaining space at Durango Village contact Miriam Campos-Root, CCIM, LEED AP or Dana Berggren at (702) 363-7600.

The fundamentals in commercial real estate remain healthy with only slight increases in vacancy rates expected for the office and industrial sectors during 2008. Recent credit restrictions have slowed overall investment activity. While vacancy rates remain relatively low for all sectors, they are expected to rise slightly in the office and industrial markets during the coming year because much of the space being absorbed is in high-quality buildings or are built-to-suit. Vacancy rates in the retail and multi-family sectors are projected to tighten in 2008 with rents rising in all sectors. Commercial real estate investment is at record-high levels, but tighter credit conditions will limit deals from moving forward because capitalization rates are low, it is likely that commercial property prices will ease. The era of rapid commercial property price increases has ended. Even with the low cap rates, the investment market is brisk. By the end of October 2007, a record $325 billion worth of commercial real estate had traded hands nationwide, with over half involving office properties prices will ease. The era of rapid commercial property price increases has ended. Even with the low cap rates, the investment market is brisk. By the end of October 2007, a record $325 billion worth of commercial real estate had traded hands nationwide, with over half involving office properties.

For more information contact Art Farmanali, SIOR: 702-363-7600