Going green is no longer for tree huggers. For commercial real estate investors in MA, it is increasingly clear that green properties and management means more green in the bank too…
According to Globe St. both Freddie Mac and Fannie Mae are working on marketing green-taqged or rated multifamily securities, and may have already been. Other investment firms like Skanska are also launching ‘green corporate bonds’ in the hundreds of millions of dollars range.
While it would be great if every firm, individual and commercial real estate investor was compelled to go green out of a desire to improve the environment, this isn’t a pre-requisite for engaging in more eco-friendly and sustainable investments.
Some of the many benefits of going green in multifamily, office and retail real estate include:
- Adding value and increasing salability of buildings
- Improving the ability to raise additional capital and attract partners
- Attracting premium tenants and increasing the premium on rents
- Creating healthier spaces which reduce liability and boost productivity
- Keeping ahead of regulations which would otherwise require expensive tune ups
- Potential to receive grants and other monetary incentives from federal and local gov.
- Reduce ongoing costs to drive up income spreads and net returns
Fortunately there are many ways for today’s MA commercial real estate investors and landlords to go greener. In fact, virtually every step and process can be made greener, dramatically decreasing the impact on the environment, and improving the health of the bottom line at the same time.
Many investors are embracing new building due to low rates, low land prices and anticipated increases. These parties clearly have a clean slate when it comes to developing, with more and more working towards constructing buildings with neutral carbon footprints. Some smaller projects are going as far as engineering their own energy sources and at least generating and purifying some of their own clean water in order to reduce expenses and to become less reliant on government.
It may be harder to ‘buy green’ as an investor, especially in areas with a high density of existing older buildings. However, in turn these areas also offer office, retail and multifamily apartment building investors significant opportunities to renovate green and add a lot of value in equity and income potential.
Even the vendors commercial real estate investors work with and their own internal operations down to methods of rent collection and communication can simultaneously make a difference for the environment and the bottom line.
It’s become harder and harder to find excuses to go green.