ATLANTA, GA, and CHICAGO , IL — Seventy-four percent of corporate real estate executives now say they would be willing to pay a premium to retrofit the office space they own to achieve sustainability goals, a new survey has found.
That figure compares to the 53 percent last year who said they would make such an investment, according to results of the 2009 CoreNet Global and Jones Lang LaSalle sustainability survey.
The survey findings released today showed that despite persistent tough times, corporate real estate execs continue to embrace and act upon sustainability values -- and some do so more strongly than ever.
Sixty-seven percent of the respondents conceded that securing funds to carry out sustainability strategies is a "difficult" or "extremely difficult" challenge. However, the research also found that:
- 70 percent (up from 69 percent in 2008 and 47 percent in 2007) consider sustainability a critical business issue,
- 89 percent consider sustainability whenever making decisions about selecting office locations,
- 41 percent always consider green building certification when administering their corporate real estate portfolios,
- 46 percent consider energy labels, and
- 60 percent said they are adopting workplace strategies to meet sustainability goals while also reducing occupancy costs, compared to 54 percent last year.
With growing knowledge about green real estate and the increasing demand for it, fewer corporate real estate execs said they would be willing to pay more for environmentally friendly space:
- 37 percent said they would consider paying a premium of 1 percent to 10 percent,
- 21 percent said they would be willing to pay a rent premium if it were offset by lower operating costs,
- 8 percent said they expected to pay less, and
- 34 percent said they expected to pay the same.
In contrast, 42 percent said they were willing to pay a premium of 1 percent to 5 percent to lease green workspace in 2008, and 77 percent of those surveyed said they'd consider paying a premium in 2007.
This year's findings are in keeping with Jones Lang LaSalle's and CoreNet's expectations.
Following the release of last year's survey results, CoreNet and JLL leaders said they expected that development and implementation of workplace strategies -- to address employee concerns, enhance 360-degree engagement in sustainability efforts and better manage energy costs with more immediate results -- would be a growing factor in the greening of office space.
They also anticipated that the market would be more savvy about green real estate, have greater expectations about its availability and, because of that knowledge, be less inclined to pay a premium when renting or leasing green space.
"These results clearly show that sustainability as an issue is here to stay, but companies are increasingly aware of the commercial realities," said Dan Probst, chairman of Energy and Sustainability at Jones Lang LaSalle, in the statement announcing the survey results. "It is no longer enough to simply be green; organizations want to see the benefits to the bottom line."
In scrutinizing that bottom line for real estate portfolios, energy costs were ranked as the most important metric and cited by 37 percent of the respondents. Employee health and productivity followed with 29 percent naming those concerns as important indices.
Forty-five percent said they are "highly involved" in providing sustainability performance data to their companies. And with companies increasingly seeking targeted investments and tighter ROI windows, more than 50 percent said that doing so presents a "difficult" or "extremely difficult" challenge. The reasons cited included a lack of tools to more exactly calculate ROI and collect performance data. Respondents also said insufficient industry metrics contributed to the problem.
This year's research involved 231 corporate real estate executives, who were surveyed in September and October. Their portfolios span billions of square feet of real estate worldwide, JLL and CoreNet Global said.
Commercial real estate services firm JLL oversees a global property and corporate facility management portfolio of 1.4 billion square feet. CoreNet Global is the leading international trade group for corporate real estate and workplace executives.
A summary of this year's survey findings is available from JLL at www.joneslanglasalle.com/pages/SustainabilityResearch.aspx and from CoreNet Global at www.corenetglobal.org.
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