Building Code Changes, Tenant Demand Means Sustainability In Retail Real Estate Is Now The Norm

Only a few years ago, sustainability in retail real estate was a sexy option. Today, thanks to changes in building codes, green building practices are mandatory. That's changing the game, including decreasing the use of LEED and increasing budgets.

End users want green buildings: an estimated 41% of American tenants across property types expect to call buildings with an emphasis on sustainability home.

But Builtech Services president Chris Noon said the new codes have changed how his firm’s clients approach sustainability. Five to seven years ago, clients like TD Ameritrade were interested in pursuing LEED certification at its locations across the country as good corporate citizens. As building codes have evolved, a majority of Builtech’s projects today could easily achieve LEED status, but clients choose not to spend the extra money to go through the certification process because the green building practices are already baked into the codes.

The most common sustainable building practices today relate to efficiency — things like energy-saving HVAC systems, windows and plumbing. The demand for these materials, along with the more stringent codes, is a major reason why construction costs are increasing.

Retail development is significantly impacted, and it is only going to get tougher. Noon said GCs should expect new costs when regulations are added into building codes, especially as they are rewritten to reflect new environmental and safety issues. (Pictured: 1000 West Randolph, which Builtech is adapting into retail for Sterling Bay.)

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