Research Paper on Green Building Technology

Opportunities for the Real Estate Industry to benefit from the adoption of sustainable environmentally focused green strategy in the US market.

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Introduction

Research explores that green properties enhance return as well as the future proof the value of real estate investment. Certainly, these kinds of properties have lower operating expenses and voids and generate higher rent. By definition, real estate is referred to the capital-intensive asset with a long life-cycle, both in terms of the investment and use. It can be obsolete with time, both operationally and functionally. However, the introduction of technologies and innovative new processes can alleviate the impact on obsolescence and, by refining the building flexibility, efficiency and resilience, promotes the value of the asset, together with developing a better environment.

Sustainability is a controversial topic in the United States as well as the entire world, this is due to the fact that there is a compromised that human is influencing the global environment. Governments, companies as well as citizens are getting more familiarizes with the impact of today's choice on tomorrow's world. Similarly, the real estate has an essential role in the advancement of the more sustainable world because of its considerable use of the land and material. Sustainability is becoming an essential aspect of commercial real estate (CRE) investors, owners, and renters, influencing longstanding value generation and short-term profitability. The commercial real estate owners create a robust approach to sustainability for existing assets can arouse competitive advantage and enhance the performance of their portfolio.

Sustainable also referred to as the "green" real estate, has the ability to financially benefit the tenants as well as the landlords and the environment. However, the quest to environment objective within the investment strategy is often encountered with skepticism. In regards to the public equity markets, this kind of study appear to be justly upfront, though, the analysis emerges to be more complex in the private real estate markets as result of the data limitation and the market opacity. Whereas the green properties definitely identified through their designations and certifications, little is known regarding their performances. While comparing to the non-green assets adds more complexity due to the need to control for the assortment of variables like location, market, quality, and age in the bid to facilitate for more of an "apples-to-apples" comparison.

Sustainability is a boiling topic in the United States as well as globally, there is an accord that human is influencing the global environment. Sustainability market is the great module of business effort toward sustainability, and as it is defined "... planning, organizing, implementing and controlling marketing resources and programmes to satisfy consumers' wants and needs, while considering social and environmental criteria and meeting corporate objectives" (Belz and Peattie, 2009). That means that environmental protection is more focused on the sustainability market.

In simple terms, green building is such kind of buildings that are intended to minimize their impact on the environment. Reduced utility consumption, such as water and energy, the use of environmentally friendly construction materials, using renewable energy as well as building operations procedures that are meant to enhance tenants' health and comfort are a compressive and concise description of the green building. In the sustainability and investment perspective, real estate is viewed as the "Property Performance," where developed real estate operation and sustainability practice can promote the high-performance assets that may create environmental and financial benefits. In the United States, it exists only two major standards of property enhanced performance. However, this is a long process; it begins with the U.S. Green Building Council's Leadership in Energy & Environmental Design (LEED) program, who apply tiered point system to evaluate the environmental performance. Then it is followed by the U.S. Environmental Protection Agency, the ENERGY STAR is applied to certify commercial buildings to check whether it has attained the superior level of energy efficiency. Fascinatingly, ENERGY STAR and LEED are viewed as the industry standard measures of the green" in commercial real estate.In recent years, a lot of emphases has been put concerning the subject on renewable resources. In the case, in the United States where the commercial buildings can be based on the environment, investors of all kinds, from real estate investment trusts (REITs), together with the insurance companies, become curious and familiarized with the acquisition standards that more likely embrace assets with the value added for sustainability strategies. All together lays the all-essential link between the smart building and environment. The following research seeks to discuss the opportunities that the real estate industry pursue to benefit from the adoption of sustainable environmentally focused green strategy in the US market.

Literature Review

The construction industry has an intense effect on productivity, public health, the natural environment, and the economy (USGBC, 2003). Globally, the industry utilizes 16% of all water available, 40% of overall energy production, 25% of all timber, 32% of renewable and non-renewable resources, 40% of all raw materials, discharges 40% of carbon dioxide gas (CO2) and produces between 30 to 40% of solid wastes (Son et al., 2011).

This has prompted rising international awareness on the benefits of sustainability in building construction. Because of this increased demand for green building construction, the past twenty years have experienced increased interest in Green building concepts globally (Gou et al., 2016). This illustrates that the Green Building has arisen as a remedy for providing buildings that are sustainable, and possess less hazardous effects on resource consumption, human health, and natural environment.

According to Yudelson (2008), the Green Building movement is "fuelled by the knowledge that the world has little time to respond to the growing dangers of climate change, especially global warming, and that buildings play a huge role in causing carbon dioxide emissions that drive global climate change." It is common knowledge that buildings assume a major role in the emission of carbon as they consume a lot of the globe's energy (Low et al., 2014).

Widespread promotion of adoption of Green Building Technology (GBT) in the process of construction has been a major concern for both scholars and industrial practitioners. Although it is attracting to adopt Green Building Technology in buildings development, and it is also attracting global attention, there is not enough research that has been conducted to improve strategies on how we can adopt Green building technology in the construction industry. A lot of question marks still arise on how the green building technology will be fully adopted in the building projects.

For us to examine the opportunities of real estate's industry in sustainable environmental focused green strategy, we must have a good understanding of what green buildings are and how to establish them. It is not as straightforward as it seems, as there is no agreement among the community of real estate that cuts across. A proper distinction between the procedure of getting the green designation and a general description of a green building must also be established. An earlier definition of green buildings by the United Nations World Commission on Environment and Development is "development that is sustainable and meets present needs that do not compromise future generations' ability to meet their own needs (United Nations, 1987).

The only negativities of the above definition are its simplification and breadth that is overreaching. In this research we will focus on a definition that is more specific and narrower as defined by USA Office of the Federal Environment Executive (OFEE), which defines them as buildings that cause an increase in the level of efficiency with which buildings and sites of construction use water, materials, and energy to reduce impacts of building on the health of humans and the environment via construction, design, maintenance, operation and removal of waste through building completion life cycle (United States Office of Federal Environmental Executive, 2003).

This definition embodies ideas used by resources that are efficient, energy, in particular, is a priority that is fundamental, however, the green buildings must gratify environmental considerations that are broader and take into account impact of a building on its environs and the population that surrounds it. Therefore they are much more than just structures that are energy efficient, like the ones Department of Energy program certifies. Usage of energy is the most distinctive feature of green buildings. Actually, buildings may score much more than half the points that are required for the lowest LEED level for constructions that are new should they meet California's Title 24 energy standards.

Natural resources conservation is also of importance; particularly water however including also the building construction materials, and in addition encouraging locally produced material use as a method of having a reduction on the use of energy that is required for transportation of building materials to the construction site. The standards of green building are designed in such a manner so as to reduce the onsite waste production, including trash and effluents.

This definition suggests that the adoption of Green Building can provide several economic, social and environmental benefits to the construction industry, which are in turn critical if the industry is expected to contribute to the world's sustainable development. There are numerous studies that indicate various material and immaterial benefits that attract stakeholders towards investing in Green Building(Mondor et al, 2013). A deeper understanding of such benefits is necessary to attract more stakeholders to boost Green Building, as that could enlighten decision making on numerous levels.

As the change in the global climate is gradually becoming more severe in recent years (IPCC, 2014), there is a need to extensively boost the implementation of Green Building among stakeholders in the construction industry. So as to make Green Building more widespread, stakeholders need to be better and fully informed of the reasons why Green Building ought to be attractive to them Chan et al, 2009). Thus, there exists no doubt that this part of Green Building - Green Building benefits - woul...