June 2022 | News | Takeaways

Four Ways to Net Zero

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In the quest to green the supply chain, warehouses play a pivotal role, says Mark Russo, director and head of industrial research for North America at Savills, a commercial real estate services firm.

Pointing out that there is more than 16 billion square feet of industrial property in the United States, with another 750 million square feet in the pipeline, Russo makes the case in a new report that the sheer quantity of warehouses in the United States makes the greening of the sector an essential component of achieving sustainability goals.

Those who pursue net zero emissions in their warehouse portfolios will reap business benefits as well, Russo says. Case in point? Green-friendly LEED industrial buildings significantly outperform the broader market with a 38% rent premium and vacancy rate of 1.9% (versus 4.2% for the U.S. overall), he notes.

Four other highlights from the report include:

1. Site selection is key. Choosing to occupy environmentally friendly buildings in optimal locations near the workforce to limit transportation emissions are two major actions firms can take toward reaching net zero.

2. For ground-up warehouse developments, designing sustainably should be paramount. Construction materials, lighting, and landscaping all impact emissions.

3. Pursuing LEED certification should be more commonplace. The percentage of industrial inventory that is currently certified is relatively small, yet LEED industrial buildings significantly outperform the broader market in terms of rent premiums and vacancy rates.

4. Nearly 30% of LEED-certified industrial properties are located near the central business district in the 30 largest U.S. metros. These properties, which represent green buildings located close to city centers with dense populations, offer the greatest potential to reduce carbon emissions for logistics operations, Russo notes.

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