Green and Sustainable Transactions Committee
The past few years have seen an exponential growth in green buildings. Green and sustainable real estate development, while once a trend or fringe concept, is now rapidly redefining real estate development practices in many areas of the United States. The growing momentum toward green development is the result of a combination of factors ? state and local government mandates, corporate sustainability initiatives, owner and tenant demand, as well as the lower operating and maintenance costs that energy efficient buildings can provide over the life of the building. The public sector, including all levels of government, is increasingly focused on green and sustainable real estate development. In fact, the federal government and many state and local governments have mandated that publicly financed real estate development projects meet certain green standards. Increasingly, these requirements are also becoming an important component of privately financed real estate development projects. Additionally, increasingly across the country, whether a project will be green or a sustainable development plays a major role in determining whether the project will receive the necessary financing, public support, and governmental approvals to move forward. Owners, investors and developers increasingly recognize that green buildings are effectively redefining what constitutes Class A office space and understand that they risk being at a competitive disadvantage unless buildings are constructed or retrofitted to new green standards, particularly once the economy turns upward again. This is also true of the retail and industrial sectors.
Green issues have the potential to impact just about every aspect of a green building project, including site selection and due diligence, financing, tax and other financial incentives, entitlements, design, construction, tenant build-out, leasing, maintenance and operations, statutory and other compliance, third-party sustainability certification, insurance, renewable energy and carbon credits, etc. Whether the standards and expectations associated with green buildings in a particular jurisdiction are in their infancy or relatively well-developed, it is clear that this is an area that is evolving rapidly making it increasingly critical that the attorneys who advise clients who are pursuing these transactions are well-informed not only regarding best practices but also the potential problems and pitfalls associated with practice in these fast developing areas.