Building Green - Pros and Cons

The 'building green' industry has become a $15 billion + industry and has gained much notoriety around the country, and for good reason. There is a lot to attract a potential buyer to a more energy efficient building product. To name a few perceived advantages:

1. Less impact on the environment
2. More cost efficient to operate
3. New market capitalization

There are a lot of things a potential buyer should know when purchasing a 'green building'. What is a LEED Certified Building? The Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ encourages and accelerates global adoption of sustainable green building and development practices through the creation and implementation of universally understood and accepted tools and performance criteria. Simply put, a LEED certified building is one that meets the nationally recognized standards of building performance. You can even purchase a reference guide on their website. (No, I don't make anything by you buying one.)

In a March, 2008 study by CoStar, green buildings were shown to hold many advantages over their non-green competition. Advantages include, but are not limited to, increased occupancy, increased rent, and sale price. Sometimes, the margins are dramatic. The cost savings actually translate into a greater NOI (Net Operating Income) for investor/owners, making the building actually worth more. Whether you're looking to reduce your energy consumption or merely make a solid Real Estate investment, that's a bottom line everyone can all agree upon.

... or maybe not? You can't argue with the numbers, but what are the long term effects of greater energy efficiency in our buildings? Could the trend and perceived under supply of green buildings be creating an over inflation in the market? - even with today's credit crisis? Are green buildings in certain areas with greater moisture or radon gas more susceptible to potential problems? I'll examine some potential long term pit falls on this blog in the future.

Reference: The CoStar Study

Contact me with questions, ideas, thoughts about this or other building related subjects (or post a comment). I want to address the issues that people find important.