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Businesses will pay more to be green

Posted: 03/11/2007

Nearly 80 percent of industry leaders say sustainability is a major issue for today's businesses, and are willing to pay a premium to achieve it, according to a survey from CoreNet Global and Jones Lang LaSalle.

The survey, "Sustainability Perceptions and Trends in the Corporate Real Estate Industry," asked workplace and corporate real estate executives about their thoughts on sustainability and what their companies are doing to achieve it, and the response is overwhelmingly green.

Even though respondents cited higher costs to build and maintain green buildings, they also believe the payoffs in terms of lower environmental impact and increased sustainability for the companies was more than worth the cost.

Of the 418 respondents to the survey, 79 percent said that sustainability is an important business issue now or within the next two years. And 77 percent said they are willing to pay a premium for that sustainability, while 22 percent said they expect to pay the same amount for increasing returns.

"These findings reinforce what we are hearing from clients every day: more and more companies are recognizing the business case for sustainability, and their corporate real estate departments are charged with making it happen to a large extent," said Ben Breslau, a vice president at Jones Lang LaSalle.

One result of the survey also shows that the gap between the actual and perceived costs of green buildings remains. Although recent studies have found that LEED buildings cost only 1 to 5 percent more than conventional buildings (and that cost premium is steadily declining), 52 percent of respondents believe green buildings will cost be pricier by 5 or more percent.

Among the other obstacles to building green reported by survey respondents were a lack of good, green real estate options for the markets they want to build in (17 percent), a spotty supply chain for green products (42 percent), or an overall limited availability of green building options (41 percent).

A global divide remains among business leaders as well: 61 percent of European respondents said sustainability is a critical issue right now, 53 percent said the same thing in Australia, and only 44 percent in the U.S. said sustainability is the thing to do now.

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