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Sustainability in CRE: Part 1 – Sustainability in Boston

Happy Patriot’s Day.

With Earth Day this Saturday, April 22nd, we are launching a series of blog posts all week discussing the concept of sustainability as it relates to commercial real estate.

Part 1 (Monday) – Intro/State of Sustainability in Boston

Part 2 (Tuesday) – LEED Certification

Part 3 (Wednesday) – WELL Certification (and how it differs from LEED)

Part 4 (Thursday) – Sustainability Without a Certification

Part 5 (Friday) – Sustainability ROI and Leases

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Intro/State of Sustainability in Boston

Sustainability has been a major buzzword in commercial real estate during the past few years, drawing the attention of property owners, tenants, and government officials.

Boston and cities across the country have mandated green building requirements, and many owners and tenants have now taken initial steps to cut down on electricity, water usage, and other costs. The push for sustainability certifications has also continued to move beyond the Trophy and Class A buildings into a much wider group of potential properties.

The reasons behind the industry-wide movement are wide-reaching and go far beyond the operating expenses bottom line, such as higher rents for landlords and improved recruitment and retention for tenants.

One of the most common ways sustainability improvements are recognized is through official certification programs, such as LEED (administered by the U.S. Green Building Council) and WELL (administered by the International WELL Building Institute).

Leed Well Logos

The Boston area has consistently been ahead of the national trend when it comes to sustainability in commercial real estate. It was the first U.S. city to require green building standards in city zoning rules, and now requires that all large-scale projects meet LEED certification standards, even if they do not proceed with the certification itself.

The city has also ranked as the most energy-efficient city in the country for four consecutive years, according to data collected by the American Council for an Energy-Efficient Economy.

There remain, however, significant areas of possible improvement – particularly when looking beyond Class A buildings.

Commercial properties in the city account for 29 percent of emissions, with most of that usage due to office buildings. And while roughly 56% of Class A properties in the city are either LEED or ENERGY STAR certified – representing 30.2 MSF – just five percent of Class B offices met the same standards, with some owners and tenants showing hesitancy in investing in energy-efficient improvements.

Boston office Certs

In addition to building code requirements, the city has also promoted incentives for building owners and office tenants. One example is the Sustainable Office Design (SOD) program offered through MassSave.

Through the program, businesses which are electric customers of Eversource or National Grid and whose space meets other guidelines can qualify for a $1.00 per leased SF incentive for energy efficient lighting and controls.

The city also requires medium and large buildings to report energy and water usage data, which is then made public, in an effort to promote greater efficiency.

The path toward increased sustainability in Boston is set to continue. The city’s Climate Action Plan has pushed to cut greenhouse gas emissions by 25 percent from 2005 levels by 2020, and targeted a total reduction of emissions to just 20 percent of their 2005 levels. So if sustainability initiatives haven’t taken root your building yet, that’s likely to change very soon.

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