Real estate developers as well as investors are progressively recognizing that sustainable developments provide relevance, resiliency, and help enhance the quality of life for tenants. By building and investing in sustainable green buildings, assets can maintain and enhance their values over longer periods of time. They also appeal to prospective renters, make financial sense, and help the country meet its sustainability goals.

With the United Nations driving Sustainable Development Goals and countries also making commitments on the climate front, several policies and regulatory frameworks have been constructed worldwide to reduce carbon footprints and optimize energy consumption. This trend is not just an American one, but a global one. The shift is inevitable and investors need to look at sustainable eco-friendly properties to mitigate potential risks from a compliance viewpoint. Sustainable properties might even become a point of differentiation in the competitive and constantly-evolving world of real estate. In specific cases, it can have enhanced marketability and economics.

Investors may view sustainable real estate as an opportunity to align financial growth with social responsibility. By financial growth we mean a potentially higher yield earned by reducing operating expenses. Reduced water and energy usage, reduced maintenance costs, and operational efficiencies can result in a higher net operating income of the property. A higher yield can also come from higher rents and lower vacancy levels by positioning the property favorably among renters who value a green building and are willing to pay a premium for the benefits it offers.

The ultimate conclusion is that a shift towards sustainable real estate signifies a recognition that environmental responsibility and long-term profitability are not mutually exclusive and they can both go hand-in-hand.

Once Skyline Point Capital takes over the management of a property, it works towards incorporating some of the elements of sustainable real estate. We don’t just do it for the sake of sustainability, but we do it because it also makes economic sense. Following certain green building guidelines allows us to create short-term as well as long-term value. 

For example, we invested in a 90-unit property called Keystone Farms in Nashville. After taking over the property, we implemented a water-saving program to reduce the amount of water being used across the property. We also installed LED lighting throughout the property. Such measures not only helped conserve a valuable natural resource like water, but also helped lower utility bills. In the long-term, it created value for us and our residents.

In another case, also in Nashville, we invested in a 94-unit property called Luxe Apartments. We liked the fact that this property already had low-flow toilets in all of the units. So, the water conservation part was addressed to some extent. We went ahead and installed EV chargers at the property to encourage the use of electric vehicles and support residents who wished to drive EVs. At Luxe, we installed LED lighting to help conserve electricity and lower utility bills.

For our future investments, we are always looking to incorporate low-flow toilets, LED lighting, remote-controlled thermostats, and Energy Star appliances.