As a panel moderator 12 years ago, I asked some of the world’s largest commercial real estate owners and developers, “Has the economic case been made to make your buildings green?”
Not a single hand went up.
I ask that same question a lot today and every hand goes up. The panelists no longer look at me like I’m a little green man from Mars.
This question is considered less crazy today because the economic case for environmentally responsible buildings is now black and white. More and more prospective tenants will not consider occupying buildings that aren’t certified as “green.” The more that big investors see the value of green in their office and multifamily portfolios, the more it will spread as a clear value-add to other commercial asset classes.
I’m proud of the 2019 CBRE Green Building Adoption Index because it now covers multifamily, the No. 1 asset type in America for total investment volume.
Congratulations to Chicago for retaining its rank as the No. 1 green office city and to Denver as the No. 1 green multifamily city. The fact that two large cities top these lists sends an important message that they are great places to live, work and play. Going green is one key to any great city, as detailed in our seminal “Millennials: Myths & Realities” and “Tech 30” reports. It also sends an important message that some of the up-and-coming hipster cities further down on the list must compete with established markets, which should spur even more green development elsewhere.
Despite this year’s terrific inclusion of multifamily, we will never stop striving to make the CBRE Green Building Adoption Index—and CBRE’s analysis of green issues—even better. In the future, be on the lookout for more in-depth discussion of the following emerging topics:
- Industrial Real Estate: The fastest-growing asset type in America still lags office and multifamily real estate in green adoption. Future reports will examine how industrial real estate is evolving and which cities are creating an environment for green industrial success.
- New vs. Retrofit: Most new office and multifamily buildings are being built for green certification and this causes our survey to skew toward those cities that have a lot of new construction as a percentage of total inventory. But there is nothing greener than reusing existing buildings and we should give a “double green” to those cities that have special programs/incentives to re-use existing structures.
- Building Materials: The U.S. clearly lags the EU in the use and standard of green building materials. New technology that increases the ability to build vertically using wood and modular construction will increasingly be adopted in the U.S.
- Tall Buildings: The sky is the solution to create efficient buildings, especially affordable housing. Cities that eliminate height restrictions will get an additional gold star in our survey.
We hope you find our 2019 Green Building Adoption Index useful as an investment, occupancy and city planning guide. The green world has seen very positive changes in the past dozen years, and we believe this report will further promote green building adoption. I was proud to be a little green man 12 years ago and I’m even prouder to be joined by a legion of little green men and women today.
Mars has attacked and is winning, but the fight continues!
By Spencer Levy, Chairman, Americas Research & Senior Economic Advisor, CBRE.