Commercial Real Estate Going Green

Daily Real Estate News May 15, 2008

Green Future for Commercial Buildings

WASHINGTON — Climate change is in the political crosshairs, with presidential candidates on both sides of the aisle advocating policies to reduce greenhouse emissions, particularly carbon dioxide. That could mean big changes for commercial real estate, since buildings account for 29 percent of all carbon dioxide emissions, said Andy Ehrlich, senior vice president of B&D Consulting, a national advisory and advocacy firm based in Washington, D.C. He spoke to commercial practitioners at Wednesday’s Commercial Legislative and Regulatory Subcommittee at NAR’s Midyear Meetings.Congress has already created an agency in the U.S. Department of Energy to evaluate ways in which commercial buildings could reduce emissions and save energy. In addition, a proposed bill (S. 2191) would require commercial buildings to reduce energy use by 30 percent beyond the standard currently espoused by American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE). After 2019, standards would get even tighter. The bill would also offer incentives to states to update their building and energy efficiency codes. The goal of the legislation, according to Ehrlich, is to reduce greenhouse gas emissions by approximately two-thirds by 2050. Most scientists estimate that this level of reduction would be sufficient to prevent significant climate change, said Ehrlich. Even without regulation, higher fuel prices and growing tenant demand are greatly increasing the demand for green buildings in the U.S., said Ehrlich. While green buildings account for only about 2 percent of new commercial construction today, he estimated that by 2010, that percentage could increase to as much as 10 percent of new construction. “There’s no perfect bullet to reducing green house gases; we’re all going to have to take part, including the owners and managers of commercial real estate,” he concluded. — By Mariwyn Evans for REALTOR® magazine online

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