How Green is Retail?

Here at Real Estate Media this week, we had our first-ever podcast on green building, and the discussion made us think about the retail sector.

Many industry sources we’ve spoken with have said that retail was slower to catch up on sustainable building than other property types. That was apparently changing, though, and developers started to make it more of a priority.

Has that trend slowed now because of problems in the economy, or are developers even more adamant about incorporating green practices to save money in the long haul?

Or was the industry not really catching on in the first place, despite some well-publicized efforts by large retailers?

3 Responses to “How Green is Retail?”

  1. 1 Randolph Wile April 1, 2008 at 8:50 am

    Retail will not be “green” until the basic lease structure changes. Landlords in most retail properties have a lesser economic incentive to “green up” their properties than do their counterparts in other property types. This is due to the net nature of the retail lease in which most expenses are borne by the tenant, rather than the landlord.

  2. 2 John April 3, 2008 at 11:48 am

    If green buildings truly bring down the long term operational costs for a tenant, then perhaps landlords can command higher rents and hence capitalize higher values for their assets upon disposition.

  3. 3 Doug April 11, 2008 at 9:59 am


    As a power center developer the bulk of cost is borne by the developer, not the tenant. As John points out if “green” results in lower operational costs then the tenant benefits, not the landlord, at least in this type of development product. Furthermore, several national junior anchor retailers are committing to “green” building design that often translates into additonal building shell costs that it expects the LL to include and bear in its costs while expressing an unwillingness to incur a higher rent to offset initial cost, etc.

    Retail is going green faster than most believe and will continue.

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