September 6, 2008

Green Buildings Gaining Steam, Albeit Slowly

Environmentally-friendly real estate may not be top priority for CFOs yet, but it is gaining steam. According to McGraw-Hill Construction, green commercial real estate is predicted to increase to $60 billion by 2012, and 10 percent of new commercial construction during that period is expected to be green, CFO.com reports.

In August, U.S. Green Building Council announced that there are now more than 13,700 building in the U.S. registered to obtain green certification. Last year, the sector survived the U.S. housing slump, generating an estimated $12 billion in revenues.

Marisa Manley, president of Commercial Tenant Real Estate Representation told CFO.com that the extra price paid for green initiatives may range from “negligible to up to 20 percent” of construction costs.

For finance chiefs ready to take the green plunge and move into an environmentally friendly building, it’s recommended that they ask for detailed specifications to ensure the building is “green in a meaningful way… [and] not just paying for someone else’s public relations,” says Manley.

Equity Office Properties Trust, one of Boston’s largest landlords, recently announced that it is outfitting all its buildings in the city to see LEED certification.

But not everyone believes green real estate is a priority. Rental cost has proved the key factor followed by retention of key staff in the decision to acquire new office space in Central London, with energy efficiency and green issues cited as the least important influencing factor.

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