commercial

Commercial Building Project Update

Posted on October 30, 2015October 30, 2015 by abrahamwien18

By Julie Lundin, Founder,
Director of LEED Process Management for Emerald Skyline Corporation

Emerald Skyline’s repurposing of our commercial building located in Boca Raton, FL is progressing and changing as we go through the development process. We have concluded the Planning Advisory Review and are now working on the Site Plan Application. As with any project, basic requirements must be met. These may include zoning, future land use designation, and city codes. One city code we were hoping to get an exception for is the Floor Area Ratio (FAR). The FAR is governed by the zoning district regulations applicable to each property. Based on our property’s zoning our “floor area ratio” – the floor area of our building divided by the lot area in square feet, cannot exceed 0.4. Since our project is registered as a LEED project we were hopeful that an exception to the 0.4 FAR could be made. The response regarding this issue during the Planning Advisory Review is that according to City Code, no variance may be granted which has the effect of increasing the intensity/FAR on a plot or parcel.

The adherence to the required FAR has presented us with design challenges resulting in both positive and negative impacts for the project. The property on which our building is located and it’s required setbacks is not large enough to accommodate any outward (horizontal) added square footage. Therefore, our option to increase the building size is by building up (vertical). This requires that a structural engineer is engaged to beef up the existing foundation and wall structure under the new space to ensure that it can support the added weight. With the addition of a second story, a stairwell has to be utilized which will use some of our already limited square footage. We have also decided to include an elevator which impacts the design and available square footage of the building. The height restrictions of 30’ based on the zoning district does not impact the addition of a second floor including the elevator shaft. The elevator component is a key design element to the exterior elevations.

The FAR of 0.4 has required us to significantly reduce the size of the second floor addition than we originally designed and wanted. This has impacted the layout of both floors and require that we re-think what is important to be included and where. As designers we have learned that what initially is perceived as negative impacts can actually lead to a better designed project. The second floor is now smaller but the green terrace is larger. This allows for more roof top vegetation and promotes a peaceful, connected to the environment space for the occupants. For more in-depth information on the benefits of a green roof please see Kendall Gillens’s post from last month’s newsletter “Vegetation is Not Solely for Landscape: The Benefits of a Green Roof”.

We are now preparing the drawings and documentation for the Site Plan Application. The site plan requires many issues to be addressed; parking, ingress and egress, landscaping, exterior lighting, ADA requirements, water and sewer, fire and life safety, etc. One of requirements of the site plan is to provide the design of the dumpster enclosures and their location on the property. Our property has very limited space which must accommodate many different elements to meet codes. The project is LEED registered with the intent to obtain the highest level of LEED certification that is possible. Sustainable design and LEED certification should positively impact all phases of a building including its design, construction and operation. We are proposing our building will be a zero waste facility in which no trash is sent to landfills or incinerators. Our goal is to send no garbage to the landfill. We will utilize new avenues for any waste and think creatively in terms of reducing, reusing and recycling. An example of this initiative will be the creation of an organic garden located at the rear of the building to process and compost organic materials to create a product that can be used to enrich the soil. Additionally, we will send materials that can be repurposed to innovative companies that will use the waste to create new products. We also plan to install portable carts with several recycling receptacles to facilitate the collection and sorting of waste materials. Our company will transport the recyclables to the recycling facilities. No commercial waste hauling will be contracted and there will be no dumpsters on the property.

We will pursue a dumpster deviation request from the City of Boca Raton and a Zero Waste Facility Certification. This is a third-party certification and we will need to meet all of its requirements. One requirement which is important is that our policy meets all federal, state, and local solid waste and recycling regulations. A zero waste facility will meet criteria to earn points toward LEED certification.

Our site plan will also contain a bicycle rack, an electric charging station for cars and pervious pavement rather than asphalt. For more information on pervious pavements please see our post “Exploring Permeable Pavement Options for LEED Projects”.

Zero Waste Business Facility Certification

Inspired by the Zero Waste business community, the U.S. Zero Waste Business Council and its Certification Development Committee have created the first third-party Zero Waste Business Certification program for facilities that meets the Zero Waste Principles of the Zero Waste International Alliance (ZWIA). Our facility certification program goes beyond diversion numbers and focuses on the upstream policies and practices that make Zero Waste successful in an organization. We have crafted the facility certification to meet the requests of Zero Waste Businesses for a valid, comprehensive verification of their Zero Waste achievements.

Objectives

The USZWBC 3rd Party Zero Waste Business Certification does the following:

Supports ZWIA definition of no waste to landfill, incineration and the environment
Drives the development of new markets and new ideas towards a Zero Waste Economy
Meets Zero Waste Businesses request for valid and comprehensive third party certification
Focuses on upstream policies and practices beyond diversion or recycling
Emphasizes strong Total Participation: Training of all employees, ZW relationships with Vendors and customers

Requirements for Certification

1. Zero Waste policy in place
2. 90% overall diversion from landfill and incineration for non-hazardous wastes

-Discarded materials are reduced, reused, recycled, composted or recovered for productive use in nature or the economy at biological temperatures and pressures
-Materials can be processed above ambient biological temperatures (>200° F) to recover energy from the 10% residual, but they do not count as part of the 90% diversion
-Reused materials (office furniture, pallets, paper, etc.) are eligible to count as part of the 90% diversion requirement

3. Meet all federal, state/provincial, and local solid waste and recycling regulations
4. Data provided to USZWBC has been published formally
5. Data documents a base year and measurements since the base year
6. Commit to submit 12 months of data to USZWBC annually (Data submitted will be public and published on the USZWBC website)
7. Case Study of Zero Waste initiatives can be published on USZWBC website
8. Recertification is required every three years
9. Contamination is not to exceed 10% of each material once it leaves the company site

A Green Lease Overcomes a Primary Obstacle to Commercial Properties Going Green

Posted on July 30, 2015July 30, 2015 by abrahamwien18

by Paul L. Jones, CPA, LEED Green Associate, Principal, Emerald Skyline Corporation

One key obstacle to overcome for commercial buildings is the incongruous lease structure. Under the most common commercial lease structures (Modified Gross and Net), the costs of a sustainable retrofit are borne by the owner while the cost savings from reduced utility bills and maintenance costs as well as the improved indoor environment inure to the benefit of the tenant.

The solution is to create a lease structure that equitably aligns the costs and benefits of efficiency, sustainability and/or resiliency between building owners and tenants, known as a Green Lease (also known as an aligned lease, a high performance lease or an energy efficient lease). In short, a green lease facilitates cooperation between landlords and tenants to make their buildings and individual spaces energy and water efficient.

Last month, the US Department of Energy acknowledged property owners, tenants and brokers who are leaders in using green leases to save energy and water in commercial buildings. In a July 2nd National Real Estate Investor article entitled “The Greening of Leasing,” Susan Piperato interviewed Jonathan Saltberg and Jaxon Love of Shorenstein Properties which was one of the “Green Lease Leader” honorees.

Figure 1 Source: National Real Estate Investor, 7/2/2015; Institute for Market Transformation

According to Jaxon Love: “We survey our tenants annually on sustainability and track interest and satisfaction with our program. In 2014, 66 percent of our tenants indicated that green building operation is important or very important to their company; 68 percent of tenants indicated that our green building operation is good or excellent.”

Further Ms. Piperato reports that Shorenstein Properties has cut energy use by 16.2% and cut carbon emissions by almost 15% which is in-line with industry expectations of a 10% to 20% savings in energy and water monthly.

According to Meaghan Farrell, energy and sustainability service, Jones Lang LaSalle (JLL), “Green leases combine the productivity, comfort and sustainability features that tenants are looking for in office space while supporting landlord priorities of improving the triple bottom line and occupancy rates. In addition to achieving both tenant and landlord objectives, green leases have social, economic and environmental implications for companies operating in today’s global economy. Green leases truly are the future of commercial real estate.” (10 Reasons to Sign a Green Office Lease, Meaghan Farrell, Environmental Leader, 10/22/2014. http://www.environmentalleader.com/2014/10/22/10-reasons-to-sign-a-green-office-lease/#ixzz3GtXfESRz)

Green leases not only bring congruity to the financial requirements necessary to do a sustainable retrofit of a building but also to encourage owners, tenants and their employees who occupy the building to employ sustainable building operations.

The JLL Energy and Sustainability Services team has identified that collaboration by tenants and landlords in negotiating and executing a Green Lease results in the following ten benefits (Shorenstein Properties notes that the collaboration required to create a green lease is the first benefit of the program):

Reduce the utility (power and water) consumption, reduce maintenance costs and save money
Improve working relationships between landlord and tenant
Support tenant and landlord corporate sustainability initiatives
Enhance corporate image/brand (especially important for retailers, manufacturers and large public companies and financial institutions)
Demonstrate vision and thought-leadership
Improve civic relations – with climate change, municipalities appreciate buildings and companies that help the community become sustainable and resilient
Contribute to LEED and other green certifications which is increasingly important for buildings to maintain and improve their competitive position
Improve employee productivity, recruitment and retention through proven that daylighting and other sustainable strategies
Generate additional savings and benefits through waste stream diversions
Do the right thing for the earth and humanity in order by reducing the building’s carbon footprint

As stated by Adam Siegel, VP – Retail Industry Leaders Association (RILA), “Green leasing is a process to identify lease provisions that can potentially be modified to address both landlords’ and tenants’ sustainability goals. These provisions tend to foster efficiency improvements that can save both parties money.”

As reported by the RILA Retail Green Lease Primer, lease provisions that modify a standard lease agreement to a green lease fall into five primary areas:

Provide for improvements to the base building shell and common areas;
Provide for improvements to the tenants’ interior spaces consistent with the building’s permitted uses;
Encourage efficiency investments by allocating the benefits derived to the party that is making the investment;
Facilitate the sharing of energy and water usage and waste generation data increasing required for compliance with municipal benchmarking regulations or LEED/Energy Star certification guidelines; and
Clarify who has the rights and responsibilities to make sustainable improvements in spaces like the rooftop.

According to the Shorenstein Properties team, the Green Lease provisions that they are working to incorporate into all of their leases include: Energy alignment; tenant sub-metering, energy information sharing, building performance certifications and green building standards.

The aforementioned RILA Retail Green Lease Primer (available here: http://www.rila.org/sustainability/issues/Pages/RetailGreenLeasePrimer.aspx) lists 13 specific areas of focus which are provided with the caveat that “Each company should assess the costs and benefits of each term before including in their contracts:”

Extend/lengthen the lease term which reduces waste associated with tenant replacement and improvements;
Expense reimbursement methodology (.In an article published in the September/October 2010 issue of The Leader, Elizabeth King Fortsneger, a CPA and LEED AP, states: “If the goal is to keep both owners and tenants motivated to support the building’s green initiatives, the modified gross lease, net utilities with sub-metering and possibly an expense stop (full service except the tenant pays utilities) may be a viable alternative.”);
Permitted use that define allowable/restricted uses for the leased premises;
Leased premises tenant build-out specifications;
Capital improvement provisions that allow the landlord to amortize and recover capital costs associated with qualifying sustainable improvements to building and common areas;
Include low-cost efficiency project expenditures in the definition of operating expenses for tenant reimbursement;
Align tax benefits and other monetary incentives for building improvements with the investing party (landlord or tenant);
Submeter each tenant space for electricity, natural gas and water with billing of tenants based on the submeter readings where state codes and utility tariffs allow it (According to Mr. Love, “…submetering…gives the tenant direct responsibility for and control over their energy (and water) cost. The economic incentive to save energy is a powerful motivator.”);
Utility data sharing whereby the tenant provides energy and water consumption data to the landlord monthly while the landlord provides the tenant with periodic reports on the performance of the whole building. As more cities require benchmarking information from landlords, the ability to gather the necessary information from tenants is a necessary condition for regulatory compliance;
Specify sustainable maintenance policies, procedures and materials for use in tenant spaces;
Specify sustainable maintenance policies, procedures and materials for use in common areas;
Define tenant obligations to participate in recycling programs which facilitates the sustainability objective of reducing waste that goes into a landfill; and
Allow rooftop or general access and control to install energy generation systems (solar power) and/or other sustainable improvements.

NOTE: For existing tenants, green lease provisions can be added to the existing lease through a “green lease addendum” that replaces or supplements portions of the lease by adding terms and incentives.

As with every lease, both landlords and tenants need to work together to develop the green provisions appropriate to the property, its use and the tenant space. Quantifying the costs and benefits may require a green diagnostic review/assessment which provides a baseline understanding of the current property operations for inclusion as benchmarked sustainability criteria in green leases, or current lease addenda.

Working with an advisor like Emerald Skyline Corporation whose principals understand both commercial leasing and sustainability can help facilitate the negotiations and the accomplishment of both your investment objectives and your sustainability goals.

Welcome to Sustainable Benefits – Let’s begin with the benefits of doing a commercial building sustainable retrofit….

Posted on February 19, 2015February 19, 2015 by abrahamwien18

2/12/15

By Paul L. Jones, Founder,
Director, Financial Advisory Services for Emerald Skyline Corporation

“Who is more foolish: The child afraid of the dark or the man afraid of the light?” (Maurice Freehill, British WW I flying ace).

Figure 1 Empire State Building – LEED Gold

Throughout my 36-year career in commercial real estate, commercial buildings have generally been classified from A to C based on location, construction quality and tenancy. Class A buildings represent the cream of the crop. They secure credit-quality tenants, command the highest rents, enjoy premium occupancies, are professionally managed and have a risk profile that supports lower cap rates and higher values. Class B buildings are similar to Class A but are dated yet not functionally obsolete. Class C buildings are generally over 20 years old, are architecturally unattractive, in secondary or tertiary locations and have some functional obsolescence with out-dated building systems and technology. NOTE: No formal international standard exists for classifying a building, but one of the most important things to consider about building classifications is that buildings should be viewed in context and relative to other buildings within the sub-market; a Class A building in one market may not be a Class A building in another.

Based on years analyzing investments in income properties, it appears to me that in the recovery from the Great Recession the commercial real estate market has evolved to include energy efficiency and environmental design as a requirement for improving the marketability of a building – not to mention optimizing its operating income and value.

COMMERCIAL OFFICE BUILDINGS

On December 1, 2014, Buildings.com, in an article entitled “GSA Verifies Impact of Green Facilities,” reported that a study conducted by GSA and the Pacific Northwest Laboratory conducted a post-occupancy study of Federal office buildings, which varied in age and size and had been retrofit to reduce energy and water consumption. The following results were based on a review of one year of operating data and surveys of the occupants which was compared to the national average of commercial buildings: High performance, green buildings:

cost 19% less to maintain
Use 25% less energy and water
Emit 36% fewer carbon dioxide emissions
Have a 27% higher rate of occupant satisfaction.

One of the most famous sustainable retrofit projects undertaken was the updating of the 2.85 msf Empire State Building whose ownership directed that sustainability be at the core of the building operations and upgrades implemented as part of the $550 million Empire State ReBuilding program. According to Craig Bloomfield, of Jones Lang LaSalle (JLL), “After the energy efficiency retrofit was underway, JLL led a separate study of the feasibility study of LEED certification” which “showed that LEED Gold certification was within reach at an incremental cost of about $0.25 psf.

Graphics on financial benefits of high-performance buildings

Source: Institute for Market Transformation: Studies consistently show that ENERGY STAR and LEED-certified commercial buildings achieve higher rental rates, sales prices and occupancy rates.

According to the report “Green Building and Property Value” published by the Institute for Market Transformation and the Appraisal Institute, a trend is emerging where green buildings are both capturing higher quality tenants and commanding rent premiums. As indicated by the above graph summarizing four national studies for commercial office buildings back up this trend on rents and occupancy, as “certified green buildings outperform their conventional peers by a wide margin.”

According to the EnergyStar.gov website, “Transwestern Commercial Services, a national full-service real estate firm, has generated impressive returns through sound energy management. In 2006, Transwestern invested over $12 million in efficiency upgrades, for an average 25% energy savings. The Company estimates that dedication to energy management has increased the portfolio’s value by at least $344 million.”
According to John Bonnell and Jackie Hines of JLL – Phoenix, “In Phoenix, owners of LEED-certified buildings can capture a premium of 29 percent over buildings without this distinction.” The premium for Green buildings had disappeared during the Great Recession and reemergence in the first quarter of 2014 as a result of improving Phoenix market dynamics which is being realized in other major markets as well.

RETAIL

For retail buildings, the tenants are driving the shift to sustainability with green building as consumers become increasingly aware of the environment and the need to reduce, reuse and recycle. According to the “LEED in Motion: Retail” report published by the USGBC in October 2014, “LEED-certified retail locations prioritize human health: among their many health benefits, they have better indoor environmental quality, meaning customers and staff breathe easier and are more comfortable. In a business where customer experience is everything, this is particularly valuable.’ Green retail buildings also out-perform conventional buildings and generate financial savings:

On average, Starbucks, which just opened their 500th LEED-certified store, has realized an average savings of 30% in energy usage and 60% less water consumption.
McGraw-Hill Construction, which surveyed retail owners, found that green retail buildings realized an average 8% annual savings in operating expenses and a 7% increase in asset value.

It is noteworthy that, according to the third annual Solar Means Business report published by the Solar Energy Industries Association, the top corporate solar user in the United States is Walmart. In fact, almost half of the top-25 solar users are retailers (the others are Kohl’s, Costco, IKEA (9 out of 10 stores are solar powered), Macy’s, Target, Staples, Bed Bath & Beyond, Walgreens, Safeway, Toys ‘R’ Us, and White Rose Foods). Other Top-25 solar users with a significant retail footprint include Apple, L’Oreal, Verizon and AT&T.

In the competitive retail market, the study also noted that being distinguished for pro-active and responsible corporate social responsibility attracts customers and investors.

MULTI-FAMILY BUILDINGS

In a study of 236 apartment complexes conducted by Bright Power and The Stewards of Affordable Housing released last July, 236 properties in two programs, HUD’s nationwide Green Retrofit Program and the Energy Savers program available from Illinois’ Elevate Energy and the Community Investment Corp. One year of pre- and post-retrofit utility bills were analyzed. The researchers found the following:

Properties in the Green Retrofit Program had realized a 26% reduction in water consumption – or $95/unit annually.
The energy consumption in the Green Retrofit Program was reduced by 18% representing an annual savings of $213/unit.
Surveyed buildings in the Energy Savers program had reduced gas consumption by 26% and had reduced excess waste by an average of 47%.
The water saving measures in the Green Retrofit program reflected a simple payback period of one year while the energy savings measures had a simple payback period of 15 years.

In an article be Chrissa Pagitsas, Director – Multi-family Green Initiative for Fannie Mae, reports that 17 multifamily properties have achieved Energy Star^® certification with two of them, Jeffrey Parkway Apartments in Chicago and ECO Modern Flats in Fayetteville, Arkansas, receiving financing from Fannie Mae.

The Eco Modern Flats complex is over 40 years old. With the goal of reducing operating expenses, the project was retrofit in 2010 with energy and water efficiency improvements including low-flow showerheads and faucets, dual flush toilets, ENERGY STAR^®certified appliances, efficient lighting, closed-cell insulation, white roofing, solar hot water and low-e windows. As a result of the retrofit, the property achieved a 45% reduction in water consumption, a 23% drop in annual electricity use including a 50% savings in summer electricity consumption while increasing the in-unit amenities, obtaining LEED Platinum certification and increasing occupancy by 30% resulting in a significant increase to Net Operating Income.

Multi-family properties made sustainable gain a competitive advantage in marketing to young professionals and other target audiences who prefer to live in an environment that is healthy and energy-efficient which saves money on utilities.

HOTELS

In a 2014 study conducted by Cornel University, researchers compared the earnings of 93 LEED-certified hotels in the US to 514 non-certified competitors. The study included a mix of franchised, chain and independent facilities in urban and suburban markets with three-quarters of the properties having between 75 and 299 rooms.

The results show that green or sustainable hotels had increased both their Average Daily Rate (ADR) and revenue per available room (RevPAR) with LEED properties reporting an ADR that was $20.00 higher than the non-certified properties (prior to certification, they reported an ADR premium of $169 vs. $160).

The researchers noted that these premiums were realized in price-competitive markets and that the amount of the premium was unexpected. From the results, they concluded that Eco-minded travelers were willing to pay a modest premium to stay at a verified green facility.

Further, the savings realized in electricity and water usage as well as reductions in waste disposal fees and costs as well as reduced maintenance costs go straight to the bottom line resulting in increased Net Operating Income. Here are some examples:

The Hampton Inn & Suites, a 94-room facility in Bakersfield, had REC Solar install carport-mounted solar panels which is offsetting 44% of the electricity costs, or up to $8,800/month – adding over $100,000 to the property’s bottom-line.
The 80-room Chatwall Hotel in New York completed an LED lighting retrofit project mid-year 2014 which will result in a first year savings of almost $125,000. The cost: just about $1.00 per LED light after rebates.

According to Flex Your Power and ENERGY STAR^® statistics, the hospitality industry spends approximately $4 billion on energy annually with electricity, including the HVAC system, accounting for 60% to 70% of utility costs. In fact, excluding labor, energy is typically the largest expense that hoteliers encounter and the fastest growing operating expense in the industry (www.cpr-energy.com). The EPA has concluded that even a 10% improvement in energy efficiency is comparable to realizing a $0.62 and $1.35 increase in ADR for limited service and full service hotels, respectively.

Many studies show that hotels do not realize the full benefit of many energy efficiency measures as guests feel no obligation to employ sustainable practices and wastes the opportunity for savings afforded by the hotel’s energy efficiency measures; however, almost half realize savings in excess of 20% reflecting that many operators have found ways to enlist guest cooperation in saving electricity and water.

According to the US Energy Information Administration (EIA) 2012 Commercial Buildings Survey, the United States had approx. 87.4 billion square feet of floorspace in 5.6 million buildings that were larger than 1,000 sf which also excluded heavy industrial manufacturing facilities. Ninety percent of the buildings that will exist in2035 have already been built – and buildings consume 80% of energy used in cities worldwide and represents almost 20% of all energy consumption in the United States.

Source: US Department of Energy 2013 Renewable Energy Data Book, 1/22/2015

The evidence is clear – building and operating sustainably pays dividends – in improved NOI from cost savings and increased revenues. Attracting higher quality tenants, improving market perception and reducing risk indicates that going Green is becoming a key for maintaining the Class of a building – keys to improving long-term values through lower cap rates.

So, why aren’t more building owners and managers going green? We will seek to discern this matter in our next Sustainable Benefits.

Now, let me tell you about this…

Posted on February 19, 2015 by abrahamwien18

10/22/14

By Paul L. Jones, Founder,
Director, Financial Advisory Services for Emerald Skyline Corporation

I freeze…become paralyzed in the face of danger or uncertainty. It is something that I am getting better at as I age but I still tend to become a deer in the headlights from time to time. In heated discussions, I never come up with the one line “Buzzinga” response until later – sometimes days later – when it is too late to be effective.

Does this happen to you? Or, are you one of the blessed people who know just the right response to any situation without giving it a second thought? Do you see a situation and instantly know and take the correct action to save the person from going into the undertow or stop the bleeding from a kitchen knife cut or have just the right response to win the debate?

We all respond to new circumstances differently. Some freeze, some panic and run, others deny what is happening like a child who pretends people cannot see him when he pulls his “magical” covers over his head. And, then, there are some charge forward full speed ahead.

Again, if you are like me, once you get over the shock of “is this really happening?” you assess the situation, spring into action and work feverishly to correct, or save, the situation….

Based on the muted reaction, or the “I am not a scientist so it does not exist” position of a significant number of our civic, community and business leaders, either they are in shock that the world’s climate can change so rapidly or they are in complete denial which is worse. The fact that many large American cities ranging from Galveston and New Orleans to Tampa, Miami and even as far north as New York City will be faced with significant issues from the rising sea level is still being debated among politicians reflects a similar approach to reality as the child with the magic blanket.

The news of global warming, now more appropriately referred to as Climate Change, is not new. Scientists have been ringing the warning bell for at least two decades. And yet we still do not want to believe.

Well, we are now starting to see the effects. Storms like Hurricanes Katrina and Sandy, increased flooding in cities like Miami Beach, increased tornado activity, the hottest year on record, and shrinking shorelines caused by sea level rise are now featured in the news on a regular basis.

Many government officials responsible for protecting the public from such events are joining in the chorus to raise awareness in order to make their job of obtaining public approval for a budget to install and maintain systems and equipment to reduce the damage from the effects of climate change feasible.

Yet, it is the real estate community that seems to most want to stick their head in the sand….For instance, last July, the Miami-Dade Sea Level Rise Task Force issued its report and recommendations. Shortly afterwards, the Miami Chapter of the American Institute of Architects held a meeting with Harvey Ruvin, Miami-Dade Clerk of Courts and Chairman of the Task Force, presenting the report. The meeting, which was broadly announced, had fewer than 100 attendees and almost no one from the real estate community was in attendance.

As reported in the June 2014 report “Risky Business: A Climate Risk Assessment for the United States”, it is apparent that climate change and sea level rise are going to have significant effects on the American global business community – and real estate, which has a particular distinction of being immovable, is going to be more impacted than most industries.

And yet. And yet the real estate community is acting as if it is business as usual. The level of interest in doing a sustainable retrofit has yet to make a significant impact on the market – especially for properties that are not seeking credit-quality tenants whose corporate sustainability policies encourage occupancy in LEED-certified buildings. (According to an article entitled “What’s Sustainability Wroth to Tenants?” by Paul Bubny of Cushman & Wakefield in the 10/28/2014 GlobeSt.com national eMagazine, ” Among the 37 real estate and sustainability directors at 23 US-based corporations surveyed by C&W, 74% see value in going to a sustainable building compared to a non-sustainable one.”¹

With the obvious costs to upgrade and improve the infrastructure – especially electrical and water and sewer utilities, as well as expected increase in insurance costs, a prudent reaction to the reality of climate change and sea level rise would be to put improvements in place now that reduce the consumption of water and power as well as to make a building less susceptible to damage from major hurricanes, storms and other weather events (like flooding).

We can only hope that real estate owners, investors, managers and tenants will soon realize that the future is now, overcome their “shock” of the impending calamity and start to take action. It is time to take action. The economic, environmental and operational benefits will be immediate and, if done right, sustainable.

And, as in any crisis situation, if you wait too long to take action, the results can be devastating. Let me know if I can be of service.

¹See (http://www.globest.com/news/12_975/national/office/Whats-Sustainability-Worth-to-Tenants-351877.html?ET=globest:e44644:11970a:&st=email&s=&cmp=gst:National_AM_20141027:editorial).