Commercial real estate owners are paying more attention to their buildings’ energy use and making their properties more energy-efficient. Almost 40 percent of energy in the country and nearly the same amount of carbon dioxide emissions come from commercial buildings of all sizes. Whether a landlord owns a small apartment building or strip mall or a large complex, making changes, creating and retrofitting green buildings and “going green” will cut costs, bring down emissions and will eventually result in more “green” for the owner.

Climate Change And Commercial Real Estate

Climate change predictions spark fear amongst scientists and world leaders. If emissions continue at their present rate of increase, scientists predict a 2.5°F to 10°F rise in average global temperatures by the end of the century.

Though a 10-degree rise might not sound so bad for Minnesota, which has 10,000 freshwater lakes, it would lead to catastrophic consequences throughout most of the world, especially in developing countries.

Water-challenged regions, from Africa to Arizona, will face the very real prospect of running out of water. These areas simply won’t continue to sustain their burgeoning populations without importing water from somewhere else. Additionally, they may become unbearably hot.

It’s difficult to imagine the already unbearably hot and humid Florida summer getting far worse. Though the added heat might not bother crocodiles, it will impact humans and other land-based species severely. Rising seas would also flood the coastal cities, adding to the misery. Stronger and more frequent hurricanes may send many Floridians scrambling north for good.

Here are the worst effects of climate change:

  • Reduction in freshwater supply.
  • Rising sea levels that flood coastal cities.
  • Extinction of many species.
  • More severe and frequent hurricanes.
  • Massive wildfires become more frequent.
  • Hot climates become unbearable.
  • Altered growing seasons for farmers.
  • Crop failures.
  • Increased disease.
  • Mass migrations to cooler regions with more water and food.
  • Famines in the developing world.

Humans require a delicately balanced environment to survive, as do most species. Drastic changes threaten to unleash misery for billions of people. Climatologists have sounded the alarm. They believe climate change has accelerated and fear humans will soon pass the point of no return.

Owners Of Commercial Real Estate Are In A Position To Help

Commercial buildings in the U.S. are responsible for an estimated 38 percent of carbon dioxide emissions and 39 percent of total energy. This is largely due to the amount of energy needed to heat, cool and provide electricity to buildings.

American commercial buildings alone emit more carbon dioxide than any other country except China. Commercial real estate owners can change these statistics.

Millennials see the world differently from their older counterparts. They grew up with climate science and climate-change predictions. As a result, most climate change deniers come from older generations. People between 18 and 31 see climate change as a direct threat in their lifetimes.

Younger Americans tend to support climate change initiatives like the Green New Deal. They don’t see it as an expense. They see it as an investment. Green initiatives can create jobs that bolster the economy while saving Americans from the expense of climate change.

For commercial real estate owners, this is welcome news. Being able to charge higher rent means increased cash flows. Higher rent also increases the value of commercial properties. As the demand for green buildings grows, the owners of green buildings will see their ROI spike.

In addition, green buildings run more efficiently, decreasing landlord and tenant expenses. The increased efficiency of green buildings provides benefits for everyone.

How Commercial Landlords Are Going Green

Going green doesn’t cost a king’s ransom. In fact, most commercial landlords see positive ROI on the money used for green buildings. Those that remain ahead of the curve on energy efficiency retain an advantage against owners of inefficient buildings, which are fast being considered out of date.

As all real estate pros know, out-of-date buildings rent cheaply, are expensive to maintain and see subaverage value increases. Commercial landlords can make sweeping changes to their properties without damaging their cash flow.

An energy audit is a great place to start. Landlords can arrange low-cost or free audits through their utility providers or hire an independent auditor. The energy auditor provides a list of potential savings opportunities.

The average energy audit results in energy cost savings of 30 percent. Common recommendations include the following:

  • Tune HVAC systems yearly.
  • Install programmable thermostats.
  • Change HVAC filters every three months.
  • Seal heating and cooling ducts.
  • Fix dripping faucets.
  • Install low-flow toilets.
  • Let grass grow to 2 ½ inches.
  • Install compact fluorescent bulbs (CFLs).
  • Seal building shells.

HVAC System Maintenance

Half of the energy output for commercial buildings goes toward heating and cooling. In the Phoenix area, the energy output to cool building in 100-plus degree weather costs landlords dearly. HVAC maintenance trims these expenses.

By changing filters every three months and sealing the ducts, landlords create efficiencies that translate directly to lower heating and cooling bills.

PlumbingTake Care Of Lawn Mowing

In the Valley of the Sun, grass takes some serious maintenance. It grows best when mowing is delayed until it reaches 2 ½ inches, which slashes maintenance costs. When allowed to grow to that length, grass also requires less water and fertilizer, a big plus when temperatures soar to 115°F.

Allowing the clippings to sit on top of the lawn provides natural fertilizer and results in a literally and figuratively greener lawn.

Bulbs Matter

Revamping lighting and installing compact fluorescent bulbs (CFLs) or light emitting diodes (LEDs) can use 75 percent less electricity and last longer. These bulbs emit more light and produce just 10 percent of the heat generated by old-fashioned bulbs.

They also last 10 times longer. Over their lifespan, these bulbs save an average of $83 compared to out-of-date bulbs. For a building with 1,000 bulbs, that’s $8,300 saved.

Seal The Building’s Shell

Much of the energy used for cooling buildings goes out through cracks in the windows, doors, floor, ceilings and outer walls, which together comprise the building’s shell. By sealing the shell, landlords save 20 percent on heating and cooling costs, which equates to 10 percent of the total energy bill.

Adding insulation also helps keep cool air in during the summer and cold air out during the winter. Energy efficient appliances are a must when it comes time to change out the old ones. The EPA and Department of Energy provide the Energy Star label to distinguish highly efficient appliances from energy guzzlers. The initial cost may be a little more, but the energy savings and tax credits mean Energy Star appliances pay for themselves.

Climate change has fast become a serious threat to arid regions like Phoenix. In the Valley, pollution from vehicles and buildings creates the smog that often hangs over the region like a shroud. In a desert city, rising temperatures and reduced water supplies always create problems.

Commercial landlords in Phoenix can make a big difference while also increasing their profits. Efficient energy systems cut expenses and increase property values. As green landlords take the increased returns to the bank, they also help preserve the region’s natural beauty and its residents’ quality of life.

Green buildings are the wave of the future in Phoenix.