By Foy & Co. Investment Real Estate Services
Environmental building initiatives aren’t going away, and there’s evidence that adopting green building standards and practices is the way of the future, even in the self-storage industry.
A 2009 study by Siemens and McGraw Hill Construction found that one-third of 180 U.S. corporate leaders surveyed anticipate becoming leaders in green and environmental initiatives by 2013. Green initiatives are viewed as primary building blocks for maintaining or developing an advantage over the competition. Nearly half of the study’s participants (43 percent) see green activities, including environmentally friendly buildings, as part of their company’s growth strategy.
Another survey conducted by Turner Construction Co., which offers construction-management services, looked at the benefits the commercial real estate industry may reap from adopting environmental building practices. The survey took findings from 800 green-building owners. The perceived benefits were:
- Higher building value (79 percent)
- Higher return on investment (63 percent)
- Higher asking rents (62 percent)
- Higher occupancy rates (52 percent)
Evidence suggests the trend toward greener business practices is continuing. Implementing environmentally friendly business strategies can potentially hold great value, and we cannot ignore the ecological and health benefits. Green buildings can potentially use one-third less energy and reduce water use by up to 50 percent.
Investment and Benefits
Although there’s evidence to suggest the self-storage industry should consider environmental initiatives, there still appears to be some hesitation on behalf of facility owners. Building sustainable facilities is more expensive, but is it worth the cost? Will a considerable investment demonstrate higher return?
Let’s face it, facility owners and operators will rely heavily on consumer conscience. Customers are looking for greener products and services, and environmental practices could certainly win over some self-storage seekers. But how many renters will be willing to pay more for a building’s sustainability is unknown.
At the moment, it’s a trial-and-error game for self-storage. There are facilities taking strides, making their facilities more efficient. Some owners have reported increased occupancies and sales as a result of the positive image generated by a more sustainable model. If environmental practices are the wave of the future and provide a competitive edge, greener initiatives are going to be increasingly important to consider. Here are a few ways to incorporate them into your self-storage operation:
- Recycled materials. There are plenty from which to choose, and using them helps reduce waste and may lower building costs.
- Solar panels. These generate electricity through photovoltaics that captures the sun’s rays. Any unused power generated could be sold back to the utility company. Added bonuses include rebates offered from federal and locals governments, and the potential elimination of monthly electricity bills.
- Light bulbs. Replace regular light bulbs with fluorescent ones, making sure to dispose of old ones properly.
- Recycling center. Some residents, particularly those who live in condominiums and apartment buildings, may not have access to recycling at their homes. Offering a recycling service could be of little direct expense to you but have a long-term advantage. A recycling center gives people a reason to visit your facility. Essentially, you’ve created a subtle marketing campaign while helping the environment.
- Community gardens. Installing a rooftop or lawn garden around the facility could be a great addition and an interesting corporate citizenship opportunity. Urban gardening and farming groups are constantly looking for somewhere to operate. They may even need a unit to store their tools.
These are just a handful of green initiatives self-storage operators should consider. Do some research about environmental products, non-profit organizations and services in your community, and then determine which will best benefit your tenants and business.
Foy & Co. Investment Real Estate Services specializes in equity raising and brokerage services for the Canadian self-storage market. For more information, visit www.foyco.ca.