A growing number of brokerage and investment management firms have developed "green" standards that are becoming essential elements in the decision to purchase existing properties or build new ones, according to a report on the Shopping Centers Today (SCT) website.
Victoria Kahn, a managing director at ING Clarion in New York, told SCT, "We have a written commitment to bring sustainability to everything we do in terms of real estate activities. We created a whole set of guidelines for investments worldwide, and it applies to clients, whether they are domestic or offshore."
Woody Heller, executive managing director and head of the capital transactions group at Studley, said, "Sustainability has not made its way into the mindset of all investors. Overall, I would say the movement has been a little slow out of the gate, because in the past the cost savings were modest and therefore not yet the primary incentive."
David Pogue, national director of sustainability at CB Richard Ellis, told SCT, "We are just beginning to see a movement in the retail sector toward sustainability. It's coming later than office buildings because in retail shopping centers, landlords typically do not control the contracting of services or control the utility meters. Much of the costs in retail real estate are borne by the retailers. They are the ones contracting for services like janitorial, cleaning, trash, so any sustainable kinds of activities would generally be done by the retailers themselves."
"Tenants are saying they want to be corporate standard-bearers, they want to be in green spaces, they want green operations," said Mr. Heller. "This is a very significant change."
"A lot of the sustainability movement is being driven by the retailers - the ones paying the bills," Mr. Pogue said. "Retailers have been sensitive to this for a long time, especially the big-box retailers. Walmart, as an example, has been trying to 'green' its real estate."
Discussion Questions: At this point, how aggressive should retailers be in insisting on high sustainability standards for the buildings they occupy? Can most afford to invest in standards that may not have short-term ROI?