Myth:  Energy efficient development does not bring the same returns as “traditional” development

Multiple recent studies show that investing in energy efficiency brings an internal rate of return (IRR) as high as 50 percent.  Compare this to traditional REIT investing with a typical IRR of about 16 percent over 30 years and investing in stocks which result in an IRR of roughly 10 percent. Considering that the future is likely to bring higher energy costs and a stricter regulatory environment mandating such improvements, energy efficient development is both a safe and responsible investment. 

Myth:  It costs too much to “build green.”

The secret to building a sustainable, socially responsible, efficient project, on budget and schedule, is a knowledgeable team  - from real estate professional and architect to contractor.  Interrelation between acquisition, site planning, entitlements, construction and marketing  is essential.  Team consensus from the outset  means the most advantageous sourcing, materials and practices will be utilized – and costs will be reduced.

Myth:  As a developer, I won’t reap the benefits of energy efficiency – my tenants will.

Developers reap the benefits of sustainable building practices in at least two ways.  First, owner-developers (those who build their own use into a larger project) will decrease operating expenses by lowering energy-related expenditures.  Savings realized by greater use of day-lighting, energy efficient water heaters, HVAC and  tight construction  pay for additional costs, if any, of transitioning to an energy efficiency model.  Second, projects that highlight social responsibility (with energy efficiency as a core component)  tend to draw a higher caliber tenant and, by virtue of lower operating costs to be passed on,  higher rents. Studies show that most costs for energy efficiency upgrades are recovered in three to five years. 

Myth:  Financing for energy efficient components is too difficult to secure.

The Socially Responsible Investment (SRI) industry accounts for over two trillion dollars in investment annually.  SRI investors seek out projects that embody financial, social and environmental advantages. Energy efficiency is now understood not as a personal goal but as a responsible business solution to the growing problem of high development, construction and management costs. SRIs are evaluated according to a “triple bottom line” that includes (traditional) financial profitability, social equity and ecological integrity.

In the past, energy efficient financing has involved a public-private partnership, but that scenario is changing. Though diverse and sometimes part of a complex regulatory scheme, the range of incentives, rebates and certifications available for up-front equity and financing for energy-related improvements is extensive.

From acquisition to ground-breaking, SR Development Resources can guide formation of short- and long-term sustainability strategies for new construction and renovation.  The result is streamlined planning, lower costs and enhanced marketability.