A Starring Role for ‘Green’ Construction

NOT too long ago, the concept of “green” building was discounted as impractical, something that might be good for the environment but not necessarily for the business climate. But that mind-set is changing rapidly.

As concerns mount about global warming and oil prices, so, too, has interest in more sustainable, or green, construction — that is, developments that balance style and function with protection of the environment and conservation of natural resources.

“You can’t open a newspaper or a real estate publication these days without seeing the word ‘green,’ ” said John Fleming, the director of commercial real estate for Johnson Controls, whose sales of products that monitor energy output have been strong.

An estimated 6 percent of commercial developments are certified as “sustainable” or have applied for certification through the Leadership in Energy and Environmental Design, or LEED, program of the United States Green Building Council. Industry experts say they expect that the percentage could rise to as high as 10 percent by 2010. And many more buildings are being retrofitted with devices that curtail energy consumption and carbon gas emissions.

What does it all mean for real estate investors?

“Green for the environment and for your bottom line,” said George Caraghiaur, a vice president for energy services at the Simon Property Group, one of the largest owners of shopping malls. “Energy expenses make up 25 to 35 percent of our controllable operating costs.”
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