What Leading Developers Are Thinking

The NAIOP is an association of commercial building developers, designers, financers, and constructors. One of the areas where NAIOP provides valuable input is in the area of future trends in building development and design. The recent NAIOP Forums meeting in Dallas offered some trends that are worth watching and considering going forward.

Although it has become almost cliche to mention, the subject of "sustainability" still rings true for top designers in the industry. In fact, the comment was made that "sustainability" is the expected norm for projects now. There was also a distinction made between "sustainability" and LEED. LEED was described as a "scorecard" and a convenient way for municipalities and states to codify better design. Sustainability was described more as a mindset or standard of performance that was broad in its application. There was also discussion of the results of joint industry/academic studies that indicate that while a "sustainable" building might not benefit from higher rent cashflows, "sustainable" buildings will lease up faster and stay leased. Finally, it was also noted that among young developers and young tenants lack of "sustainability" can be a deal breaker.

A second topic of considerable importance for the future is water. In fact, the discussion centered around water as the next oil in terms of value and importance to the growth of an economy. It was highlighted that the generation of electrical power requires and consumes vast amounts of water to cool the generators. The explosive growth of data centers that require multiple megawatts of electrical power is indirectly adding to the demand for water. Coupled with population growth and climatic shifts the availability of usable water for consumption and for generation of power the value of a reliable source of water is increasing significantly. It was suggested that this might lead to the development of higher density housing and projects as a means to reduce the energy demand caused by "urban sprawl".

So while there are still many people who are interested only in the lowest cost option for their building the leading architects, engineers, and developers are keenly aware of the need to provide energy efficient buildings with high levels of sustainable design.