THE BOTTOM LINE LOOKS INCREASINGLY GREEN

As an investor, I’m always looking for new ways to enhance the long-term value of Alliance’s properties. In commercial real estate, that generally means making properties more attractive to  lease, reducing operating costs, or anything else that enhances resale value. More and more often, energy efficiency and other green initiatives can do all three.

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Energy upgrades are an investment. Upgraded roofs, windows, insulation, HVAC systems, water heaters, etc. can all save money on utilities and maintenance. Rooftop solar can provide free (or discounted) electricity, tax incentives, and other renewable energy payments, depending on the location. Like other investments, the devil is in the details.

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Many energy upgrades are cost-effective on their own, but a wide variety of government incentive programs make specific investments particularly compelling. State and local governments have their own environmental goals, with money set aside to pay to help pay for sustainability improvements. Tax rebates to invest in lower operating costs? We investigate all the relevant energy options and government programs for every investment property, on a regular basis.

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When an upgrade offers marginal returns, it might make sense to fold it into a larger renovation project. Updating properties is a normal part of the commercial real estate business these projects offer a great opportunity to invest in sustainability at reduced cost. While Alliance specializes in net-lease properties, those lower operating costs make a space more attractive to renters, leading directly to improved property values. The marketing benefits of having “green” buildings is valuable too.

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Solar is the most visible green technology. Most commercial buildings have roof space that is sitting idle, and I love putting that dead space to work for my investors. Add in federal tax credits and state level incentive programs, and roof solar can offer very compelling returns. Wireless building controls offer another attractive option. Internet-connected HVAC, for example, lets building managers see and control this critical system, anytime and anywhere. It’s a great way to reduce costs and make a building easier to maintain.

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These days, it often pays to keep environmental concerns in mind. People want green-and-clean. But even more importantly, investing in efficiency is good business.

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