Green for granted
Seven years ago, green developments were all the rage – respecting the environment was a distinguishing feature in the marketplace, and landlords and developers saw it as a responsible approach to doing business. Speaking in spring 2007, condo marketer Bob Rennie – then launching a division of Rennie Marketing Systems to handle LEED (Leadership in Energy and Environmental Design) certified properties – quipped, “Green is the new black.”
But during the recent Canada Mortgage and Housing Corp. housing outlook conference in Vancouver, Rennie said his firm’s survey of 3,700 homebuyers found that green is less of an explicit priority than it used to be.
“When we asked them to rank the top 10 influencers when it came to deciding on a condo purchase, the order was location, price, transit and building amenities, and – the same as our survey last year – green elements came in dead last,” he said. “Surprisingly, even those who do not own a car ranked green as last.”
Smaller tenants of commercial properties are no different.
Colliers International surveyed office tenants earlier this year and found that just 21% identified the sustainability features of a building as a critical consideration when scouting space. Seven years ago, a similar survey found that 90% of tenants deemed sustainability as a priority for landlords, while more than 60% of tenants were willing to pay a premium for environment-friendly space.
“Green isn’t as big an issue,” observed Bart Corbett, a senior vice-president with Cushman & Wakefield Ltd., at the recent Vancouver Real Estate Leasing Conference.
It’s still a point of pride for companies when it comes to demonstrating responsible business practices, however. The major tenants frequently have mandates to fulfil, including a mandate to respect the environment. This often requires being able to demonstrate that they’re responsibly managing and even reducing energy use – and building systems have to allow them to do this.
“One of the biggest things we came across was separately metered electricity and utilities,” Corbett said. “[Tenants] want full control of that so they [are] accountable to themselves.”
Accountable space
Watch for a new measure of office space, if John O’Bryan, chair of CBRE Ltd., is right.
Speaking at a breakfast prior to the real estate leasing conference, O’Bryan said the rapid compression of office environments over the past decade is increasingly prompting employers to link office rents to head counts rather than floor space.
“Collaboration is the constant theme of this new workplace,” he observed – and that extends to the sharing of office space by groups of people rather than individuals.
“Office buildings were initially built in an era where densities were 200 to 250 square feet per worker,” he said. “We are rapidly approaching 100 square feet per person, or less.”
Of course, the phenomenon was noted earlier this year when Altus InSite president Sandy McNair addressed the Vancouver Real Estate Forum. With more people per floor, McNair said, planners, developers and architects are reviewing how to adapt building systems to accommodate greater per-floor populations.
This in turn changes the value equation for both landlords and tenants, who find themselves having to ante up for the new high-performance systems the new density requires.
“It’s no longer enough to discuss gross rate in absolute terms,” O’Bryan said. “A more telling metric is rent per employee, not rent per square foot.”
Tunnel vision
Downtown offices may be packing in more people per floor, but a recent study of traffic flows south of the Fraser indicate that commuter flows are on the rise outside of Vancouver.
Construction of the Canada rapid transit line to Richmond has been key in the shift, according to Geoff Freer, formerly executive director of the South Fraser Perimeter Road project and now heading up the George Massey Tunnel replacement project for the B.C. Ministry of Transportation and Infrastructure.
“Quite often during the day more than 60% of [commuter traffic] is actually going into Richmond, and then in the afternoon, coming from Richmond,” Freer told a meeting of the Delta Farmers’ Institute earlier this month. “It’s no longer going to Vancouver.”
The development of office and industrial space in surrounding municipalities, as well as more affordable housing, has also increased traffic flows between suburbs rather than into the region’s core.
“That’s driving what we need to do here,” Freer noted.
