Green Real Estate: Sustainable Development Practices
Sustainable development practices earned renewed focus in recent years thanks to the premium placed on emission reduction and volatile material costs. Green real estate is more than a buzzword; it’s a philosophy that is guided by some of the most important development trends and practices across the country.
What is Sustainable Real Estate Development?
Sustainable real estate development integrates eco-friendly design, building, and operations to reduce the environmental impact of residential and commercial development. It’s more than just minimizing waste or using recycled materials. It also incorporates a social justice component to increase the economic value of the project to benefit the community and underserved populations.
Putting the Pieces Together
Sustainable development ties together every element of a construction project from concept to completion. Combined, these components deliver immediate and long-term benefits to owners, occupants, communities, and the environment.
Sustainable real estate leverages:
Energy-efficient systems for HVAC, lighting, and water conservation
Eco-friendly materials
On-site renewable energy capabilities
Intelligent site selection
Local hiring and materials sourcing, when possible
Who Does Sustainable Development Benefit?
Eco-friendly developers offer a range of benefits to the local economy and the environment. Because the practice encompasses every aspect of planning, construction, and ongoing property management, many project stakeholders enjoy immediate and long-term benefits of sustainable development.
Some benefits of sustainable development include:
Environmental impact – Sustainable real estate developers select recycled or eco-friendly building materials that have lower emissions during manufacturing, such as a lower petroleum content, use natural materials, or can be sourced nearby.
Economic impact – Many sustainable development companies rely on local skilled labor during construction, providing quality employment opportunities directly or via subcontractors. This also provides training opportunities to upskill the local workforce on new techniques and materials.
Long-term, sustainable real estate developments are more attractive to tenants because of their lower energy and water costs.
Health benefits – Sustainable building materials reduce the risk of volatile organic compounds (VOCs) that lower indoor air quality. Energy-efficient HVAC systems also improve ventilation and improve air filtration, reducing the risk of illness for commercial properties.
Related: Environmental, Social, and Governance: Practical, Not Political
Sustainable Development in Practice
Perhaps the most notable example of sustainable development is the Bullit Center in Seattle. This six-story office complex incorporates several core components of sustainable design and construction, including:
A complex rain-water recycling system
Rooftop solar array
Zero “red list” building materials, such as mercury and lead
Longevity, with an estimated lifespan of over 250 years
Real Estate Sustainability Trends
Construction and development have an outsized impact on global carbon emissions. According to one study, roughly 36% of final energy use and 40% of energy-related carbon emissions are the result of residential and commercial construction. These figures declined briefly in 2020 due to a rapid decline in construction starts but experienced a rapid rebound in 2022. Energy consumption in the construction industry increased more in 2022 than at any time in over a decade.
Room to Grow
Developers, property managers, and investors have rushed to support environmental real estate companies in reset years – and with good reason. The green construction market is forecast to surpass $770 billion by the end of the decade, with high-value REITs putting a renewed emphasis on sustainability to lure tenants to new developments. Sustainable real estate investment has proven relatively insulated from the otherwise volatile commercial real estate market in the pandemic era.
It’s a convincing pitch. Record-high demand for rental homes and multi-family developments ensures long-term stability to support the incremental cost increases associated with initial construction. Renters are happy to pay more per month or sign longer leases for environmentally sound locations because they’ll spend less on energy and enjoy higher living or workplace standards.
Work with an Experienced Green Development Company
Keen Technical Solutions brings a fully integrated approach to every sustainable development project. From HVAC to lighting to design, our energy experts improve outcomes and deliver quality work on schedule. Learn more about our unique capabilities; speak with a Keen representative today.