Going Green Can Pay Off Big for Commercial

The Natural Resources Defense Council (NRDC) released a report this month that details some of the benefits — monetary and otherwise — that green infrastructure can contribute to commercial buildings and their surrounding communities.

Combining their own independent research with the findings of other scientists and organizations, NRDC highlighted the following as benefits that commercial developers and builders could reap from such investments:

  • Landscaping adds approximately 7 percent to the average rental rate for office buildings.
  • Researchers have also found that office workers have a clear preference for nature near the workplace, leading to improved health and job satisfaction, and reduced levels of stress
  • In retail areas with a mature tree canopy, customers indicate that they are willing to pay 8 to 12 percent more for products sold there.
  • Green roofs have been found to add 16 percent to the average rental rate for multifamily units.

The study also found green infrastructure can help commercial investors avoid certain common losses and risks:

  • A single large tree can generate nearly $45 in annual energy savings.
  • Green roofs are typically considered to have a life expectancy of at least 40 years, as compared to 20 years for a conventional roof.
  • Landscaping helps to mitigate flood risks, which reduces flood damage costs, thereby increasing property values by 2 percent to 8 percent.
  • Numerous studies have found significantly lower rates of property crime, violent crime, graffiti, vandalism, and littering in urban areas with high levels of vegetation, when controlling for other factors.

The study sites several real-world examples of savings garnered by both municipal and privately-owned commercial buildings. The authors note that the 20,300-square-foot green roof on Chicago’s City Hall and Cook County municipal building yields $3,600 each year in energy savings. Nearly 100 times that amount is being saved for the Target Center Arena in Minneapolis thanks to its green roof: It has decreased annual energy costs by a whopping $300,000.

“On any given property, these benefits can add up to big money over the long-run,” Larry Levine, a senior attorney for NRDC’s Water Program, writes in a recent blog entry about the findings. “The report shows why it’s essential for players in the commercial real estate industry to consider the full range of green infrastructure benefits in order to make wise investment decisions.”

The report also discussed local incentives available to commercial projects across the country. Milwaukee’s Regional Green Roof Initiative provides up to $10 per square foot for green roof projects. In King County, Wash., builders can earn back 50 percent of the costs of green infrastructure retrofits, up to $20,000. Philadelphia has awarded $7.9 million in competitive grants for green infrastructure retrofits on commercial properties. The study also noted incentives in Portland, Ore., and New York City.

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