Let’s Talk Green
Green construction is thriving. Consumers are becoming more concerned about climate change and other environmental issues. LEED certification has been an up and coming trend in the last few years in the CRE industry. There are over 38,000 LEED projects in the U.S. and about 1.32 billion square feet of LEED residential buildings. Companies are making efforts to save money and protect the environment by choosing to go green. States with the most green construction projects include Texas, California, and New York.
LEED certification consists about 40% of green construction’s contribution to the economy. In fact, LEED buildings are expected to contribute about $30 million to the country’s GDP. With that said, let’s explore the top metro areas that are efficiently creating a sustainable environment through green construction.
In terms of average square feet, the Chicago and Boston metro areas have the most green residential spaces. Chicago holds the most LEED certified residential projects at 1,263 projects. Densely populated and urban cities tend to have the most green residential buildings and high rises. Other cities that boast many green residential projects are New York City, Dallas, Los Angeles, Washington D.C., and Austin.
Meanwhile, the country’s capital of LEED certified construction is Washington D.C. Along with D.C., New York, Los Angeles, Chicago, and San Francisco have the most green commercial projects.
These populated areas have the luxury to undertake green projects because they have the infrastructure to build them. They have sufficient technological development, great centers of trade, and commerce.
However, we can’t forget about smaller cities. Compared to major cities, smaller areas obviously do not have as many green projects. However, that does not mean they haven’t made any green efforts! Cincinnati currently has over 1,100 green projects. In addition, Jacksonville, NC has made efforts to construct sustainable buildings.
Impact of Green Buildings on CRE
Not to be dramatic, but our planet is deteriorating. Consumers today are more aware of changes in our environment. Green buildings in the real estate industry are not just good for the environment—it’s also good for businesses. Many consumers feel that firms should take action in protecting the environment by implementing sustainable strategies. In terms of energy consumption, the real estate industry beats other sectors, such as industrial and transportation.
Financially, investment in green buildings increase the value by about 4% on average. Companies can also save a lot in utilities since these buildings are made with long-lasting components that help protect the environment. Between 2015 and 2018, green buildings can save as much as $1.2 billion in energy costs and $54.2 million in waste costs. Interestingly, it is easier to re-tenant if your firm needs to vacate a LEED building. CRE property lease rates are as much as 20% above comparable non-LEED buildings. Green spaces attract people, so the chance of getting new tenants for a LEED certified building is moderately high.