Some highlights on responses about “green space” from brokers, tenants and owners in the local Baltimore/Washington corridor. Some this material was presented at the MD Chapter NAOIP seminar, “ Do Green Buildings make Dollars and Sense?”. The data was obtained from direct conversations with leading local tenants, brokers and owners and is a sampling of attitudes toward green space. I was a panel member and discussed the following:
"It’s not a fad but more a movement!"
Primary businesses occupying green space in the local BWI corridor:
Systems integrators, defense IT working with government agencies.
Government agencies (Federal, State and Local).
Primary LEED product types:
Highest concentration of LEED rated buildings in the local market are office. Very limited inventory in LEED rated flex buildings, multifamily or retail.
Broker’s pulse on green space:
Main tenant drivers for occupying space is still focused on “cost and location”. Green is not yet the primary deal driver.
Some state funded new projects placed into RFP proposals. Government contractors are being asked to comply.
Some tenant’s perceive it to add costs to occupancy.
Tenant’s pulse on green:
“Our increase in rental rate was offset by the decrease in operating cost.”
“Less a corporate mandate and more grass roots demand.”
“We use it to our advantage to hire and attract employees.” Our employees make use of the green amenities and love the space”
“It’s a nice to have but not willing to pay more for the space.“
“We come for the quality of the building, not specifically because it's “LEED rated”
Tenants desire more specifics on quantifiable savings in the leasehold valuation for net effective rent.
LEED rated building owner’s pulse on green space:
No uniform definition of “What does green mean”?
Sustainability = efficient operation generating a bottom line return.
Most owners agree, sustainable buildings create value for a long term asset.
All ground up projects are going LEED (no cost on new buildings).
Prioritizing retrofits for LEED EB on low efficiency buildings with high energy cost.
“All else being equal, it’s a great marketing tool.”
Use of specific “green lease provisions” may become more important.
When do you thing we will start to see a substantial uptick in the demand from local tenants?
As more product becomes available, to choose.
When tenants clearly understand quantified cost benefits and is built into the leasehold valuation.
As local green building incentive programs, corporate policies, regulations, favorable policy environment and stricter codes proliferate.
Source: Tony Casalena, CCIM