The commercial real estate industry has changed significantly during the past few decades, and more attention is being paid to sustainability than ever before. It is critical for the commercial real estate sector to consider various green energy initiatives in 2023, not only for sustainability, revenue growth and profit margins, but also as a matter of California law.
A number of trends have emerged in the construction industry during the past year. This includes carbon reduction, sustainability, resiliency, and occupancy wellness. Now, there is a stronger framework surrounding carbon accounting than before, including new policies in California that require solar energy for new buildings.
In the wake of the pandemic, sustainability has been emphasized, along with occupant wellness to create a unique environment in commercial real estate.
Green Energy Initiatives Can Drive Profit Margins in 2023
In particular, new green energy initiatives have emerged, and these create opportunities for commercial real estate owners to increase their profit margins. For example, innovative platforms can help commercial buildings track their energy and water consumption automatically. Then, using this information, property owners can identify opportunities to reduce water and energy consumption, slashing utility bills and saving money.
Another way for commercial real estate owners and developers to drive profit margins is through solar power. According to NPR, electricity has gotten more expensive during the past few years, and buildings that are able to generate their own electricity can save a significant amount of money.
James Rector, Director of Solar Lending at Sunwest Bank explains, “High energy costs are a key consideration for everyone. People are trying to address inflation-driven high energy costs, and solar offers a solution.”
This can even turn into a revenue driver, as net metering might allow the building to sell its electricity to the power grid.
People Want To Work in Spaces That Prioritize Sustainability
Even though these direct measures can help commercial real estate owners and developers boost profit margins, the reality is that an increasing number of people want to work in spaces that prioritize sustainability. Customers care more about where they spend their money than ever before, and people care more about where they work than ever before.
Surveys have consistently shown that people might even be willing to take less money to work for a company that prioritizes the health of the planet. Therefore, if commercial real estate developers and property owners take steps to create a more sustainable footprint, they might have an easier time attracting tenants and buyers. This could drive up the value of the property, helping to boost profit margins.
As sustainability only becomes more important, it is critical for everyone in the commercial real estate sector to identify opportunities for green energy in 2023. It could be a significant revenue and profit driver for years to come.