NEW YORK — Green buildings are blossoming around the world, but retail developers seem to have a black thumb when it comes to the issue.
Although all developers undergo vigorous environmental impact evaluations before building any property, none of the major retail real estate investment trusts has tackled sustainable retail centers — that is, retail centers designed with recycled materials and the technology to use fewer natural resources and less energy, produce less waste and provide cleaner air to tenants. But this could change, in time.
According to the U.S. Green Building Council, the annual market for green building products and services was $5.8 billion in 2004, a 34 percent growth from the prior year. A total of 217 million square feet of commercial space in the U.S. is certified as Leadership in Energy and Environmental Design properties, the council’s ranking system to determine a building’s sustainability and environmental responsibility. Mixed-use projects and commercial office towers top the list of property types, but there are no major retail projects.
Some small retail developers have chosen to go green with select properties. Georgia-based Melaver Inc. designated its Abercorn Common center in Savannah as a LEED core and shell project, which means that the structure, envelope and building systems are being built to USGBC standards. Within the mall, Circuit City is developing its first LEED store.
Other commercial developers, such as Silverstein Properties, the Albanese Organization Inc. and The Durst Organization, on the other hand, have led the charge and invested heavily in green properties on a grand scale. Though expensive up-front, the long-term savings of developing green is one incentive for sustainable development. In an October 2003 study on the costs of green development for the California Sustainable Building Task Force reported that a 2 percent increase in initial construction costs to build a green property averaged 20 percent savings in energy and other costs over the life of the building.
Tenants generally pay a premium to be in a green building, but neither individual nor corporate lessees seem deterred. In New York City, for example, Albanese’s green luxury residential property, The Solaire in Lower Manhattan, sold out before opening, while Bank of America partnered up with The Durst Organization for a major green office tower to serve as the financial services company’s headquarters in Midtown. Like the developers, tenants of these properties see long-run savings, in addition to breathing cleaner air and being more environmentally sound. According to the U.S. Environmental Protection Agency, tenants can save up to 50 cents per square foot each year with new technology for green properties.
Retail developers not interested in gaining LEED certification — whose requirements often include solar panels, rainwater storage facilities, high-performance glass windows and expensive heating, ventilation and air-conditioning systems — can do their part just by developing and managing their properties smartly.
“Lifestyle centers and transportation-oriented development can significantly reduce the contaminants and lower the emissions that go into the air from shoppers’ cars,” said David Goldberg, spokesman for Smart Growth America, a Washington, D.C.-based advocacy group. “If people can park or take the train to one area and run errands, do some recreational shopping, eat dinner and see a movie at one place, it’s an incredible savings on the air.”
Vertical shopping centers are also a more environmentally sound bet than a mall or big-box store. Hard surfaces such as rooftops and pavement prevent water from filtering into the ground and replenishing the water supply; therefore structures that maximize the amount of stores under a small rooftop and footprint can protect the water quality and quantity in the area of the development.
But even simple solutions, such as Simon Property Group’s award-winning recycling program, can help build environmental awareness within a shopping center.
For developers interested in green-friendly cities, the EPA ranks the top 10 environmentally sensitive urban areas in the country. In its April list, Austin, Tex.; Boulder, Colo.; Chicago; Honolulu; Madison, Wis.; Minneapolis; Oakland, Calif.; Portland, Ore.; San Francisco, and Seattle maintained the best water and air quality, accessible and reliable public transportation, green building practices and efficient use of resources.