Real estate developers, leasing professionals and retailers are always on the look-out for ways to improve tenant appeal, increase tenant retention, and boost consumer sales. Common approaches include, tenant improvements, rent reductions, and consumer promotions.
Besides offering incentives that save on green, many real estate professionals are acknowledging the benefits of going green. Common approaches to embracing green initiatives are by enacting energy management and sustainability measures or to become LEED certified, both of which can offer benefits to ownership and tenants alike. There are pros – think state and/or government-backed incentives and rebates – and cons – lengthy certification processes – to green initiatives.
The well-known retailer, Walgreens, took energy efficiency one step further by opening its first net zero energy retail store in Evanston, Illinois last Fall. Zero energy is what every commercial real estate property owner and property manager dreams about, abuilding whose total amount of energy used on an annual basis is roughly equal to the amount of renewable energy created on site. Hence, zero net energy consumption.
Walgreens zero net 14,000-square-foot retail store harnesses its energy from wind turbines, rooftop solar panels, and a below-ground geothermal system. It is expected to use 200,000 kilowatt hours (kWh) per year and in turn generate 220,000 kWh per year –therefore, making it not only net zero but energy-plus due to the 20,000 kilowatt surplus. It sells the excess energy to Evanston city’s local electric service provider.
Energy efficient design measures at the store include LED lighting, daylight harvesting, carbon dioxide for heating, cooling and refrigeration equipment, and an energy-efficient heat pump developed and manufactured in Europe.
The trend for commercial properties to reduce their carbon footprint is gaining ground, as many energy efficient measures are becoming easier and more cost-effective to implement. For example, rooftop solar panels are easier to install and maintain, and financing opportunities are growing for both the commercial and residential sectors. Electric vehicle charging stations in shopping centers and office buildings are gaining momentum as consumer demand for energy-efficient cars continues to increase.
Meissner Jacquet Commercial Real Estate Services, a San Diego-based real estate management firm, is at the forefront of the energy management and sustainability trend by recently assisting a client with the installation of multiple electric vehicle charging stations at the owner’s retail centers located throughout Southern California. Jerry Jacquet, a Principal of Meissner Jacquet, advises his clients on the importance of energy efficiency. Jacquet says that “it’s especially important as California’s Assembly Bill 1103 mandates commercial property owners to disclose energy usage at the time of sale, lease to a single tenant or refinance, and this directly affects many of the property owners that Meissner Jacquet works with.”
Top this off with state and/or government-backed incentives, and it wouldn’t make sense not to invest in green initiatives.
Net Zero isn’t limited to retail developments such as Walgreen’s, DPR Construction’s regional office in Phoenix was conceptualized as a “net-zero energy workplace of the future,” a physical tribute to urban revitalization and sustainability. The construction company incorporated passive/active cooling solutions including operable windows, shower towers, solar chimney, and a photovoltaic solar panel covered parking lot to control the indoor environment and produce on-site energy. The office uses 129,624 kWh per year and generates 142,871 kWh, resulting in a net energy use of -13,255 kWh– making it energy-plus.
Meissner Jacquet Commercial Real Estate Services works with its clients to enact energy management and sustainability measures at the commercial properties it manages. Jerry Jacquet, a Principal at Meissner Jacquet, notes that “although it is costly to enact larger sustainability efforts, it will prove to be an industry norm in the coming years.” While Europe has paved the way for green initiatives, the U.S. is taking steps to retrofit existing buildings and incorporate LEED standards into new construction. Jacquet says that “the goal is to create smart buildings that will positively impact the environment and future generations’ quality of life.”
Sources:
NAIOP Development Magazine Summer 2014, Walgreens Opens First Net Zero Retail
Store in U.S.
Living Building Challenge, DPR Construction’s Phoenix Regional Office
CNBC, 7 Bold Commercial Real Estate Predictions
Meissner Jacquet Commercial Real Estate Services