Sustainability Adds Value to Real Estate Assets, Liberty Executive Says

Billy Grayson, director of sustainability at Liberty Property Trust (NYSE: LPT), joined REIT.com for a video interview at NAREIT’s 2016 Leader in the Light Working Forum at the Ritz Carlton – Coconut Grove in Miami.

Liberty owns office and industrial space throughout the United States and the United Kingdom.

Grayson highlighted the importance Liberty places on sustainability goals and benchmarks. He noted that the company’s sustainability program is more than a decade old. In the early days, Liberty used Energy Star as its first tool to drive corporate energy efficiency, Grayson said: “Energy Star was really the cornerstone of our sustainability program.”

Over the years, Liberty has tried to broaden its program to include more environmental factors and different metrics, Grayson noted.  Liberty is now actively involved in LEED certification through the U.S. Green Building Council, which has become part of how Liberty defines sustainable, high-performing buildings.

“We’re looking to LEED and EnergyStar as third-party validation of the environmental sustainability of our properties and also leveraging that as a tool to be able to benchmark our portfolio against others and show performance improvement over time,” Grayson said.

According to Grayson, Liberty’s LEED- and Energy Star-certified buildings are averaging 30 percent lower energy costs per square foot than other buildings in the portfolio. He added that they are outperforming the market by about 42 percent. These data points provide Liberty’s brokers and leasing team with the evidence to show that there is extra value in a sustainable, high-performing building.

Meanwhile, Grayson stressed the need for brokers and the appraisal community to value sustainability, incorporating it into how they talk about properties and evaluate the net asset value of a building.

“There is an inherent asset value associated with sustainable, high-performing buildings that doesn’t always get captured by the traditional real estate metrics. We think it’s something the marketplace will increasingly incorporate into how they value REITs and specific building assets,” Grayson observed.