Companies are scrambling for eco-friendly office space and there simply isn’t enough to go around. By 2030, seven out of every 10 businesses looking for sustainable offices won’t find what they need and nearly half of those wanting green industrial space will come up empty, too. This green space shortage is about to reshape the entire commercial real estate market.
What’s behind the surging interest in commercial real estate sustainability? Companies increasingly see that green buildings aren’t only better for the environment, but also for their bottom line.
Sustainable properties use less resources, save costs and improve tenant satisfaction. And for many companies, going green is essential to comply with increasingly stringent climate regulations.
Property managers who go green and track their progress don’t just help the planet—they get a real edge over their competition. New technology is making it way simpler to pull off than it used to be.
4 reasons for property managers to prioritize sustainability
Market forces are driving the push for improved sustainability in commercial real estate, according to panelists at a recent Building Engines Connect virtual conference. They discussed four ways that enhancing sustainability creates a competitive advantage:
1) Strengthen talent attraction and retention
Younger generations want to work for companies with strong sustainability credentials. With Gen Z representing approximately 30% of today’s workforce, companies can’t afford to ignore their values.
Green workplaces offer one of the most visible opportunities to bring corporate sustainability commitments to life, making them a top priority.
2) Reduce costs
With electricity demand soaring, volatile energy prices are creating economic headwinds for many businesses. Improving energy efficiency is the smartest way to cut rising energy costs.
Researchers estimate that green buildings in the U.S. consume 25% less energy than non-sustainable properties. They also use less water and tend to have lower maintenance costs.
3) Support long-term growth
Enhancing commercial real estate sustainability protects long-term building value. Across global markets, green-certified office buildings command rental rates that are 7.1% to 11.6% higher. Additionally, companies with higher sustainability ratings and strong governance typically pay a lower cost of capital.
“There’s plenty of research showing how higher sustainability scores lead to better loans and better investment opportunities, creating a more valuable and vibrant portfolio,” says Brannon Perkison, Principal Product Manager for PAM Sustainability at Building Engines.
Learn more about how to adopt a modern approach to commercial real estate sustainability.
4) Manage business risk and compliance
As governments around the world introduce increasingly stringent environmental regulations, property management teams must comply or risk penalties and reputational damage.
For example, New York City now limits greenhouse gas (GHG) emissions from commercial buildings, and California’s new Refrigerant Management Program (RMP) requires companies to conduct periodic leak inspections for commercial-grade HVAC equipment. Meanwhile, governments in Australia, Singapore and the European Union have introduced sustainability and climate risk reporting requirements.
For companies operating in any of these jurisdictions, capturing and managing accurate sustainability data is no longer optional — it’s essential.
Driving sustainability progress in commercial real estate
No matter where you are in your sustainability journey, reaching the next stage requires a three-pronged approach: plan, act and manage.
Step 1: Plan
“As part of any goal in life, you need to build out the achievable steps,” says Sarah Riley, Senior Product Manager at Building Engines. She recommends establishing a baseline metric by measuring current energy usage, waste and carbon footprint.
“You can also create a property-specific sustainability roadmap with return-on-investment calculations that balance the tenant experience with operational efficiency,” Riley adds.
Step 2: Act
Once you have a plan in place, you can develop, prioritize and execute sustainability initiatives that drive progress, focusing on properties where sustainability improvements will yield the highest returns.
“Typically, you can start small and then build as you go,” says Riley. Initial projects may include installing smart building controls, LED lighting or Internet-of-Things (IoT) solutions for real-time building performance monitoring.
Step 3: Manage
Monitoring sustainability data helps you identify opportunities for continuous improvement. Additionally, you’ll have the stats you need to ensure regulatory compliance and market your property’s sustainability credentials to current and prospective tenants.
“You really can’t drive transformational change across your properties without some way to measure and manage it,” says Perkison.
How technology enhances commercial real estate sustainability
Managing sustainability data can be frustrating without the right tools. Rather than cobbling together numbers from spreadsheets, using a property management platform like Prism makes it easy to access all the data you need to support corporate real estate sustainability.
Prism’s soon-to-launch Utility Analytics module lets property managers see energy, water and emissions data alongside other property metrics so they can integrate sustainability into day-to-day operations.
With essential data at your fingertips, it’s easy to:
- Create sustainability reports
- Comply with mandated reporting
- Achieve cost savings
- Improve operational efficiency
- Track and attain sustainability certifications
- Compare performance across properties
- Identify areas for improvement
Sharpen your competitive edge with sustainability data
Ready to drive transformational change across your portfolio? Prism pulls together all the data needed to make smart sustainability investments.
Discover how Prism helps property managers maximize energy efficiency and achieve savings.
