4 Sustainability Trends Driving Commercial Real Estate for Earth Day 2021

CRE Trends Earth DayOver half a century ago, the United States inaugurated a special day, April 22, as Earth Day. As we prepare to commemorate the global phenomenon, The Robert Weiler Company is excited to announce that the green movement is alive and well in the commercial real estate industry.

What began as a localized, American movement, is now celebrated by more than 192 countries. The goal is simple but profound: raise awareness regarding humanity’s impact on the global climate and how, collectively, we can affect positive change. Commercial real estate developers are ensuring that the goal of Earth Day is being met, as evidenced by widespread initiatives in green design and sustainable building.

World Green Building Trends 2018, a thought-provoking report of the efforts to build green, revealed that sustainability initiatives have skyrocketed in recent years by more than 60 percent with continuing efforts projected to increase another 57 percent by end of 2021. Even more impressive is that 19 additional countries adopted these initiatives, making an even greater global impact.

With such encouraging news leading up to this important annual day, The Robert Weiler Company has taken this opportunity to highlight current trends in commercial real estate sustainability. To be sure, some of these developments have been gathering momentum for decades. But if the latest dire climate change warnings from scientists the world over are any indication, the time for enhanced action is now.

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Watch for These 4 Sustainability Trends in Commercial Real Estate

Sustainable, responsible and impact investing (SRI) is a powerful investment discipline that considers environmental, social, and corporate governance (ESG) criteria to produce long-term competitive financial returns and a positive impact on society. According to a 2018 Bloomberg Report, the total assets managed under the umbrella of values-based, socially responsible, and impact investing had grown from $8.7 trillion in January 2016 to $12 trillion in January 2018, an increase of 38%. Since 1995, when the size of the U.S. SRI was first measured at $639 billion, these assets have increased more than 18-fold. (And according to a February 2021 Bloomberg Report, Global ESG assets are on track to exceed $53 trillion by 2025; this is said to have been a perfect storm generated by the pandemic and the green recovery efforts in the U.S.)

Carbon emissions, water consumption, and plastic waste were all on the list. Investors were also closely analyzing efficiency in plumbing, electrical, lighting, and HVAC critical systems, building materials, construction waste, mixed-use space, and occupant wellness. So, with this overview framing the conversation, here are the four key trends defining the new age of sustainability:

1.) Space Design and Integration

When you think of “green” design, you may not consider the layout or function of the interior building space. But, companies are seeking innovative ways to drive productivity via their workspaces. Ultimately, companies believe that the optimized use of office space will increase employee engagement in meeting organizational objectives and drive higher revenue. It’s why the demand for mixed-use property for sale has become so popular, as a live-work-play hybrid.

Builders and commercial real estate investors must plan for and create flexible spaces that will include sit/stand workstations, lounge-like waiting areas, and active meeting rooms to accommodate this new corporate, co-working dynamic. Ceiling height, room dimensions, furniture, and other facilities must be adaptable and remain in multi-purpose mode.

The flex space approach has helped produce a surge in mixed-use buildings, which is currently an attractive investment for those in the commercial real estate space. As such, builders need to prepare areas for load-sharing opportunities and gain an enhanced awareness of how people are working, living, and playing together within structural environments.

2.) Wellness

The demand for employee wellness — as it applies to different work environments — has permeated into almost every work culture across a broad spectrum of industries. The greatest challenge to assessing, implementing, and investing in wellness initiatives is cost. As such, building design can have a significant impact on creating wellness-friendly environments. Wellness concepts are initiated during sustainable building projects through the following examples:

  • Proper ventilation and moisture control
  • Optimal acoustic performance
  • Maximum natural lighting
  • Minimal use of materials with volatile organic compounds

Advocates of wellness environments see these elements as critical to employee productivity and health. From an Earth Day perspective, there’s an implied ripple effect, where happy, healthy, employees surrounded by a greener, cleaner working space positively impact the natural environment. Moisture controls reduce bacterial growth, limiting infections and the secondary carbon footprint of having to drive to a doctor. Improved acoustic properties also reduce potential medical intervention, whereas natural lighting reduces energy usage.

3.) Resilience

Resilience is a property’s ability to rebound after an anticipated disaster. And, with all of the destructive storms in recent history, climate resilience has taken a foothold in commercial real estate development. Building developers have pushed the resilience methodology one step further by using a disaster as a way to improve a building’s performance during restoration. From a commercial real estate investment standpoint, the concept strengthens the property from a storm’s impact, while significantly reducing maintenance work in the future.

So, what is the practical implementation of climate resilience? Builders evaluate a variety of factors when planning for a resilient property. Can local materials be sourced? Are labor resources nearby to decrease time in fixing critical issues?

Also, since more durable materials are necessary to combat potential storm damage, builders look for other ways to reduce project costs, whether it means using less (fossil) fuel-based machines or integrating renewable energy alternatives. Not surprisingly, companies are already investing about $1 trillion annually in climate resiliency and climate change by purchasing more eco-friendly properties.

Investments that address climate change by helping companies adapt and prepare for climate impacts are good for business and will pay dividends over time. They also help reduce costs and potential losses by making companies more resilient to environmental risks. Keep in mind that these investments can finance buildings as well as manufacturing, water, agriculture, waste management, and pollution control.

4.) Solar Energy

Solar power investments have quintupled over the last five years. Why? Property owners, lawmakers, and other entities are continuing to create more momentum for solar power as it becomes more affordable to buy and less expensive to generate.

Leading corporations, along with more than 155 American cities, are transitioning to solar energy in addition to other forms of clean power. Architects, engineers, and contractors are now vested in the idea that net-zero buildings are achievable. The U.S. Energy Information Agency (EIA) projects that solar installations in 2020 and 2021 (approximately 13 GWac of utility-scale solar power and 4 GWac of small solar power) will continue growing astronomically year-over-year; thus, making it a more viable investment for commercial real estate developers.

As a whole, the EIA January 2021 inventory of electricity generators showed that developers and power plant owners expect 39.7 GW of new electricity generating capacity to start commercial operation in 2021 — which is now already underway. Solar will make up the greatest share of new capacity (39%), followed by wind (31%).

With commercial and industrial office buildings consuming nearly 30% of the world’s energy, it’s hard not to overlook their impact on the environment, on the economy, and in society at large. However, environmental concerns are not the only reason why commercial real estate developers are shifting toward sustainable building solutions. Recent trends suggest that the market demand for sustainability becomes greater each year. Thus, investing in green initiatives can result in substantial financial rewards while playing a role in saving the planet.


Going Green by Growing Green in Columbus, Ohio

Over our 80-year history, The Robert Weiler Company has seen enormous changes to the Columbus, Ohio landscape. From single-family neighborhood developments in the 1940s to mixed-use properties such as Highpoint on Columbus Commons today, our commercial real estate team has adapted to the effects of climate change. That’s why we’re dedicated to building cleaner, greener, more environmentally sustainable structures. Also, you may be interested to learn more about what a commercial real estate consulting firm does.

Rather than standing in defiant opposition to the natural world, today’s buildings are returning to an ethos espoused by leaders from earlier times. President Franklin Roosevelt may have said it best: “A nation that destroys its soils destroys itself. Forests are the lungs of our land, purifying the air and giving fresh strength to our people.”

In 2017, Columbus Mayor Andrew Ginther unveiled “Sustainable2050,” a sustainability initiative to promote environmental efforts in our community. Also, the Smart Columbus initiative from the City of Columbus seeks to reinvent our transportation system, forging new ways to combine sustainability with better mobility for the citizens of our region. To that end, we look for new ways to join these efforts while meeting the demands for walkable communities, smart technology, and reusable energy.

Together, as we approach the 51st Earth Day with determination and resolve, our commercial real estate brokerage team looks forward to working with increasingly sustainability-minded Americans. Earth Day should be celebrated – and acted upon – every day. Ready to invest in sustainable building projects or have one to put on the market? Reach out to the “green” team at The Robert Weiler Company by calling 614-221-4286.


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