2012 Hot Markets: Green Building, Retrofits Offer Growing Opportunity
This article is part of our Hot Insurance Markets for 2012 special feature.
Green homes accounted for 17 percent of the overall residential construction market in 2011. And the trend of going green isn’t expected to stop.
By 2016, green homes are expected to grow to between 29 percent and 38 percent of the market, according to the National Association of Home Builders’ (NAHB) recently released “Green Home Builders and Remodelers Study.”
The housing market is critical to the U.S. economy, and despite the drastic downturn in housing starts since 2008, green has grown significantly, says Harvey Bernstein, vice president of Industry Insights and Alliances, McGraw-Hill Construction.
The greening of existing homes is also a hot spot in the construction market. Remodeling homes to be green is expected to grow dramatically as some 22 percent of remodelers report that they anticipate they will be dedicated to green work in 2016. That’s nearly triple the 8 percent who report being dedicated to green work in 2011, the study said.
The greening of commercial properties has also experienced tremendous growth in recent years, which may be opening doors for brokers targeting these risks.
Green retrofitting of commercial buildings now outpaces the construction of new green buildings.
As of December 2011, square footage of Leadership in Energy & Environmental Design (LEED) certified existing buildings surpassed LEED-certified new construction by 15-million square feet on a cumulative basis.
McGraw Hill Construction’s Green Outlook 2011 report states that by 2015, the green share of the largest commercial retrofit and renovation activity will more than triple, representing a $14 billion to $18 billion opportunity in major construction projects alone.
“The U.S. is home to more than 60 billion-square-feet of existing commercial buildings, and we know that most of those buildings are energy guzzlers and water sieves,” Rick Fedrizzi, president, CEO and founding chair of the U.S. Green Building Council’s (USGBC), said in a statement. “Greening these buildings takes hands-on work, creating precious jobs especially for construction workers.”
David Cohen, senior director of property at Fireman’s Fund Insurance Co., said his company has seen increased customer interest in retrofitting to make their buildings greener.
“Green buildings can boost real estate owners’ bottom line by protecting and building net operating income, attracting and retaining quality tenants and improving the environment,” he said. “Simply put, green buildings create a triple-net effect, benefitting the owners’ bottom line, its tenants and the environment.”
More Hot Markets for 2012
- People Moves: Chubb’s Westchester Announces New Head of Programs, COO
- Palm Beach Revolt Forces Sylvester Stallone to Abandon Mansion Sea Barrier
- Senate Says Climate Is Causing Insurance ‘Crisis’; Industry Strikes Back
- Man Charged With Hiring Another to Burn Down His Home for $1.3 Million in Insurance