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The Value of Sustainability in Commercial Real Estate

Nashville has one of the hottest real estate markets in the country right now, spurring a flurry of big investments and new construction. 

Developers are projecting 4 million square feet of commercial real estate construction for Nashville in the coming years, and three 250,000-square-foot developments are already slated to open in the first half of 2020. 

All of this new construction is expected to slow rent growth in the city. The increased competition may also make it harder for owners of older buildings to demand the high rent they’re accustomed to charging. To stay competitive, commercial real estate investors in Nashville must make their buildings more attractive. Investing in sustainability is one way to do that.

Why Sustainability Is a Good Business Decision

In the past, companies would “go green“ only for ethical reasons, but today, investing in energy efficiency and sustainability is also a good business decision. Here are some reasons why:

Efficient buildings save money.

Better efficiency means lower electricity bills, which can save tenants and real estate investors money. When tenants are shopping around for a building to rent, they are looking at their total monthly cost, which includes electricity. Reducing electricity costs can deliver savings to tenants without having to lower the rent.

Sustainability is appealing.

Studies show that building tenants value sustainability and waste-reduction programs. Outfitting an older building with efficiency improvements can help attract tenants who otherwise might turn to a newer building. 

Efficiency hedges risk.

Building codes all over the world are changing, requiring buildings to become more efficient than ever before. Commercial real estate investors who don’t improve the efficiency of buildings in their portfolio run the risk of becoming obsolete. Preparing now for inevitable changes in regulations is the best way to avoid risk in the future.

Sustainability makes buildings resilient.

Energy efficiency provides buildings with added value that can help them weather volatile real-estate markets, changing building regulations, and even natural disasters. Energy-efficient improvements are a simple, low-cost way to protect a real estate investment.

The Low-Risk Path to Energy Efficiency

Rather than investing in a large-scale efficiency project, commercial real estate investors can get state-of-the-art efficiency improvements with a subscription through D.I. Pathways. For just a flat monthly fee, D.I. Pathways will install and maintain phase change material (PCM), which helps regulate building temperature. PCM can save building owners up to 30 percent on heating and cooling costs, and D.I. Pathways guarantees that the fee will be lower than the building’s energy savings. 

To learn more about how D.I. Pathways can help improve your commercial building, contact us today.

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