A new Bentall Kennedy report on sustainability has founded that owners who invest in sustainability as well as amenities like fitness centers and rooftop gardens generally find that their properties outperform non-green buildings on occupancy, tenant retention, and net operating income.
“Europeans have embraced sustainable real estate for some time, and it’s become a bigger priority for American investors as well,” said Doug Kinney, executive v.p. of client relations and product development. “In many countries, pension plan guidelines require that sustainability scores be factored into the investment process. The Netherlands are true leaders in this area – sustainability is a driving force in their investment planning.”
Sustainability became a trend in the U.S. office market around 2010, at the same time that the economy was crawling out of the recession, noted Dara Friedman, senior v.p. of portfolio management. “Global capital flows into SRI have significantly increased, and as real estate owners, we are aware of the diverse needs of our tenants and investors,” added Kinney. “Sustainability is now at the forefront.”
Bentall Kennedy has also benefited from tenant engagement, as evidenced by its work with the tenants in San Francisco’s 475 Sansome Street. After acquiring the property in 2012, the firm launched a tenant engagement program and active leasing campaign. Over the past four years, the firm has moved the property to LEED Platinum status and reduced energy consumption by 24%. “Since 2012, our energy management initiatives have generated more than $22.9m in utility cost savings,” noted Friedman. “Green buildings create value through rental rate premiums, fewer rent concessions, and occupancy rate premiums.”