Publications

- December 1, 2019: Vol. 31, Number 11

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The new economics of sustainable real estate

by Marc DeLuca

Sustainability has been gaining a lot of attention, with youth climate strikes and global activism making headlines. It is also increasingly informing the investment decisions of institutional investors.

The commercial real estate industry has done a considerable amount of work to construct and upgrade commercial structures so they are more sustainable. Because so much has been accomplished to this end, it might seem as though only marginal gains in energy reduction and cost savings lie ahead. On the contrary, substantial economic gains can still be achieved.

According to the Department of Energy, “On average, 30 percent of the energy used in commercial buildings is wasted, which presents building owners and managers with a huge opportunity for operating cost savings.”

The government estimates commercial property energy costs totaled $180 billion in 2014; therefore, cutting usage by 30 percent would create an estimated $54 billion in annual accumulated savin

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