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Aug 227 min read

Green Building Trends in Commercial Real Estate

Going green and being sustainable is part of a global effort against damaging the environment. It’s part of everyone doing their part to reduce the amount of materials, carbon emissions, and waste that generates harmful greenhouse gasses. This extends to commercial real estate, where it’s become a trend to incorporate green and sustainable practices into buildings. Some of these trends even have tax benefits provided by the federal government. 

According to the United States Environmental Protection Agency, buildings made up around 6% of the 2019 global greenhouse gas emissions. However, this is as much as 16% when factoring in the electricity that’s used in buildings. It’s easy to see why eco-friendly initiatives are becoming more prevalent in CRE. 

In this post, we’ll be looking at some asset types and the green building trends that we’ve seen in their construction. We’ll cover why these trends are considered sustainable and how they’re implemented. If you’re looking to improve your impact on the environment, and do business with other CRE companies that prioritize the “E” in ESG (environmental, social, and governance), this post will help you learn about these practices within each asset class. 

Sustainability in Healthcare Buildings

Healthcare buildings like hospitals, doctors' offices, and specialty care facilities are essential infrastructure for most communities. And yet these healthcare CRE assets  also very large buildings that have very strict requirements for temperature, air quality and energy usage. This results in a significant contribution to greenhouse gas emissions as a result of electricity use:

  • Health care facilities consume close to 10% of the total energy used in U.S. commercial buildings (PracticeGreenHealth.org)

  • Most of the energy used is for cooling (40%) (ElectricityPlans)

  • Health care is the third-highest energy consumer (EIA)

Sustainable facility design is the practice of operating cleaner, green buildings. Inpatient hospitals may be around only 7% of healthcare buildings, according to RZero, but they use the most energy. Outpatient buildings tend to use the same, on average, as other commercial buildings. So what are some trends in healthcare building sustainability? 

Many of the green and sustainable trends in healthcare are focused on small improvements that add up over time. That said, larger systemic changes like an energy-efficient HVAC system will have a large impact over time. 

For an example of a sustainable healthcare building, see the design of the Texas Children’s Hospital. This hospital is designed not only to be environmentally conscious but also welcoming, relaxing, and less scary for younger patients.  

Trends Among Green Hotels

According to Better Buildings Hospitality, the average guest room incurs around $2,200 in energy costs annually. This is almost double the cost of an average home’s annual cost year-round. Energy Star found that 27% of this was cooling, 23% lighting, and 11% was space heating. 

Some popular sustainable trends in green hotels and resorts are: 

  • Low-flow plumbing: Decreasing the flow of water to various sources and decreasing water pressure to use less water

  • Infrared HVAC systems that deactivate when an occupant isn’t present

  • Solar panel arrays and wind turbines

  • Energy-efficient laundry systems and encouraging guests to reuse linens and towels

  • Incorporating local native foliage into the landscaping in design to reduce strain on irrigation systems

  • Reusable water bottles and water-filling stations

  • Donating excess food to local charities

Green trends in hospitality are focused on hotels and resorts operating in harmony with the local environment, rather than in a contest with it. This involves architecture and landscaping that’s mindful of the local environment. 

For an example of a sustainable hotel/resort, see the 1 Hotel San Francisco, which is has incorporated sustainability into each room with wooden key cards, drinkware, recycled water bottles, shower timers, and energy-efficient HVAC systems. 

Sustainable Mixed Use Building Trends

As the commercial real estate industry evolves, mixed-use development has risen in popularity for its ability to blend commercial and residential usage while resulting in a more walkable, accessible city. Another benefit has been the environmental sustainability of mixed-use buildings. 

Mixed-use development encourages the use of public transportation, walking, and bike travel rather than driving. It also allows for the more effective and efficient use of land. As office spaces are remodeled into mixed-use spaces, they often implement green plans, like water conservation systems, grey water recyclers, renewable energy sources like solar energy, and electric vehicle chargers. 

It’s a trend for developers to incorporate some popular sustainable practices not only for their benefit to the environment but also as an attractive feature for prospective residents and businesses. Mixed-use buildings also commonly reuse existing infrastructure for a more efficient building. This is especially important when commercial construction can generate a lot of carbon emissions. 

Sustainable Office Trends

Office buildings face a lot of competition in attracting potential clients.

With 36.9% of the U.S. carbon dioxide emissions being from commercial and residential buildings, according to the EIA, sustainable practices are a growing trend for not only having a lower environmental impact but also standing out from the competition. Some common trends for sustainable offices are: 

  • Implementing energy-efficient appliances, especially in office kitchens and break rooms

  • Energy-efficient designs and construction, especially in building:

    • HVAC

    • Lighting

    • Management systems

  • Public transportation options to offices (public transportation stipend for employees)

  • Recycling and composting options at offices

  • Green cleaning supplies

  • Water conservation with water-efficient:

    • Plumbing

    • Irrigation

    • Gray water recycling

    • Rainwater harvesting

Green Parking Trends

On, average, in U.S. cities with over 1 million people, 22% of the land is used for parking, according to The Hill. It may seem like there’s little that garages and parking structures can do to be green or eco-friendly, but that’s far from the case. Sustainable parking structures take advantage of a few key features to be more eco-friendly: 

  • Insulation in parking structures attached to buildings is important for the efficiency of the air conditioning units in those buildings

  • Movement sensors in the parking lots

  • Rooftop solar panels to support the facility or neighboring buildings

  • Add electric vehicle charging stations to encourage and support sustainable vehicles

Even if a parking structure isn’t the main feature of your property, it still on average takes up a lot of square footage. Demonstrating sustainability can be a part of a larger initiative to making green CRE. 

Sustainability in Retail

Retail spaces like shopping malls use an extreme amount of energy — around 650 kWh per square meter each year, according to Electro Industries. To improve this, there are a few eco-friendly retail trends to pay attention to. These trends attract not only customers to shop are your retail space but also potential clients looking to establish eco-friendly and sustainable stores. Younger generations, in particular, value eco-friendly practices in retail. Some of these trends are: 

  • Improve facility scheduling during non-operation hours

  • Motion detectors for lights in bathrooms and rooms that may sit empty

  • Energy management systems to identify inefficiencies in a system

  • Regularly servicing and updating HVAC systems to be energy-efficient

  • Reduce excess waste and implement recycling programs

Eco-Housing Trends

What is sustainable housing in commercial real estate? This section covers three types of CRE green building: affordable housing, student housing and senior living.

Green affordable housing

For the average American family, sustainability may not be in the scope of the budget of a household. Sustainable housing is where developers, usually in collaboration with a non-profit or local government, provide housing that incorporates sustainable practices. 

However, this represents a great movement toward developers creating homes that implement green building technology, energy-efficient practices, and passive, sustainable electricity such as solar. 

Student housing

Sustainable student housing is especially important to younger generations that are environmentally conscious. These housing complexes: 

  • Use renewable energy, especially solar

  • Recycle waste 

  • Are built using eco-friendly materials

  • Use energy-efficient light bulbs

  • Use low-flow toilets, shower heads, and faucets

  • Implement high-efficiency irrigation nozzles

Energy efficiency is an area especially highlighted in improving the sustainability of student housing. Energy use intensity in student housing has a very high range: from 40 to more than 600 kBtu/ft2 across all dorms, according to EnergyStar. Most of this energy usage comes from air conditioning. 

Senior living

With a large aging population, sustainable senior living is an effort to make senior and 55+ retirement communities more eco-friendly. This is an area of CRE that has always struggled, as senior care facilities often have a lot of excess waste and a lot of overhead transportation waste. However, there are a few steps that senior living communities are taking toward sustainable living: 

  • Solar panels for sustainable energy sources

  • Low-flow water 

  • Energy-efficient light fixtures

  • Alternative energy sources like geothermal and wind turbines

  • Recycling and composting for excess waste

  • Locating care centers in central areas, so residents don’t have to travel far for medical appointments

  • Sourcing food, furniture, and other materials from sustainable sources

Additionally, a larger trend is to make the green initiative part of the community’s identity. Gardening, recycling, and composting initiatives can all become group actions that active seniors love to take part in.

Biscred Puts You In Touch With Sustainability Companies in CRE

Our commercial real estate database includes over 2,700 companies (and growing) with asset experience in sustainability. Connect with REIFs, REITs, general contractors, engineering and architecture firms, builders and more that are committed to green building practices. 

Total companies with asset experience in sustainability by company industry. Over 1,100 of them are in construction. 

 

It’s no surprise that 500 of the companies are headquartered in California. 



In addition to experience in sustainability and CRE, these companies also specialize in industrial, educational, office, healthcare and retail commercial real estate. 



 

Photo 94867452 | Building | Teerayut Khuenwan | Dreamstime

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