Real estate markets are sucking wind these days (regardless of occasional blips of good news), but there’s one way commercial real estate firms can make their money go further: energy efficiency, says a study by enviro-investor group Ceres and Mercer.
The study, available here, notes how financial services giant TIAA-CREF is expected to reduce energy use in its real estate portfolio by 10 percent by 2010, and is already yielding $4 million per year in reduced costs so far.
Jones Lang LaSalle’s efforts to retrofit New York’s Empire State Building will translate into $4.4 million in annual energy savings, the report says.
And a 2009 Maastricht University study found U.S. office properties with “EnergyStar” ratings had rental rates 3.5 percent higher than unrated buildings, six percent increases in occupancy rates, and a 16 to 17 percent premium on sales prices per square foot.
“This report documents what common sense tells us – that an energy efficient building is a more marketable building,” said Ceres President Mindy Lubber, who also directs the Investor Network on Climate Risk.
“Increasing energy efficiency in our buildings can increase occupancy rates, leasing prices and sale prices, all in a highly-competitive environment,” Lubber said. “And energy efficiency – stopping the waste of energy we use – is America’s cheapest, cleanest, smartest and most readily available new energy source.”