When Mr. Green Meets Mr. Green

I’ve decided to stop spraying weed killer on my lawn and let it go au natural. I still have someone mow it, but it has sprung a bunch of white and pink flowers (aka pretty weeds) that I think are attractive. I didn’t do this because I am a super “green” guy (though that was part of it).

On a scale of 10, where 1 is “these birds are too noisy so let’s spray some DDT and Agent Orange out there” and 10 is “eating vegetables is murder”, I am probably a 7. I’m environmentally sensitive, but it would not stop me from driving a 1968 Ford Shelby GT 500 that requires a leaded-fuel supplement.

The biggest reason I stopped my weed service was to save my dog Murphy, a three-year-old bearded collie, who, while he is the nicest dog I have ever met (yes I am biased), is made out of glass and has chronic health issues.

We have taken Murphy to the vet almost weekly for the past two years to treat a variety of rashes and intestinal ailments, and a little weed killer on his sensitive skin wasn’t going to aid his recovery. The signs my lawn guys kept putting up after weed treatment—“keep your kids and pets off this lawn for 24 hours”—sealed the deal.  I have enough trouble controlling where I walk, let alone my kids or dog. Hello dandelions!

The choice to “go green” in commercial real estate is evolving as well. Back in 2008 when I hosted a panel of some of the largest commercial real estate investors in the world, I asked them “has the economic case been made to retrofit your projects with environmentally sensitive upgrades?” Not a single hand went up. When Mr. Green (environmental concerns) meets Mr. Green (cold hard cash), tough decisions need to be made.

Fast forward to today. When I ask similar questions at panels, most hands go up both for major building retrofits of common areas and for tenant spaces, as well as for virtually all new office development. Being “certifiably” green through LEED or Energy Star designations is becoming the industry standard. Why? The decision to “go green” has nothing to do with what owners and developers think; it has everything to do with what their tenants and, more importantly, their employees think (those pesky millennials!) Our recent Occupier Survey details the increasing importance of environmental sensitivity among employees.

It is no coincidence that the number of buildings certified as “green” or “efficient” has gone up from 5% in 2005 to 38% last year in the top 30 U.S. markets. Congratulations to Chicago for getting the No. 1 rank as the most-green office market in America. A terrific study jointly led by CBRE and Maastricht University—the 2017 Green Building Adoption Index—will tell you all about it.

Which brings me back to my lawn. Canceling my weed service may be one of my better ideas, but the home sales market may think differently. Someone is going to see my natural lawn and assume that “if he doesn’t care about his lawn, he probably doesn’t care whether his hot water heater is in good shape”. And down the rabbit hole we go.

How much risk am I taking that the market will understand I’m actually giving a little bit of love to Mother Earth? I suppose I can decide to restart the lawn service a year before I decide to sell (and outfit Murphy in a doggie hazmat suit every time he goes outside). Or, I can roll the dice and think that the market is flush with green thumbs who will understand my decisions and cut me some slack. When Mr. Green meets Mr. Green, these are tough decisions to make.

By Spencer Levy, Americas Head of @CBREResearch | Senior Economic Advisor, CBRE.

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