19th December 2022

The Primary Market’s Future: More Sustainable and More Lucrative New Developments

The Primary Market’s Future: More Sustainable and More Lucrative New Developments

Jessica Edgerton, Leading Real Estate Companies of the World® Executive Vice President of Operations and Corporate Counsel, talked to Brown Harris Steven's Chief Architecture and Design Officer, Dan Seigle, about trends in lucrative new developments and sustainability. This discussion was a part of LeadingRE’s Q4 Webinar Week, "Power Up For 2023!"

Below are some of the top takeaways from the webinar:

Everything is going electric. Starting in 2024, New York City will require that newly constructed buildings under seven stories not use gas for cooking and space heating. "The regulatory influences are a big part of why we're starting to see real movement in this area," Seigle said.

As a result of the regulation, developers will outfit buildings with appliances such as induction cooktops and electric ovens.  Seigle believes this shift toward sustainable appliances is not specific to New York City.

Sustainable technology advances in buildings continue beyond the kitchen. Seigle says that developers are starting to outfit every garage parking spot with charging stations and that green roofs are becoming more efficient. "The technology has been around for a while, but I think we're now seeing buyers embrace it, especially when they see it executed at a really high level," Seigle said.

According to Seigle, the rise of electric cars is making sustainability more mainstream across the board. "The reality of climate change has made people reconsider every purchase decision," Seigle said.

Health is also at the forefront of buyers' concerns. Seigle notes how consumers valued alcohol amenities and beverage refrigerators previously, but he has noticed a shift towards herb cabinets, LED water filters and the modern larder, a cool area for storing food prior to use. Seigle says that buyers have the most questions about air quality. "It's top of mind for buyers," he said. "As technologies advance, we are seeing building systems that provide constant airflow."

Sustainable features have become more aesthetically pleasing. "There are a lot of examples of green technologies that used to be kind of ugly that are now sought after," Seigle said. He cites progress across the spectrum of the built environment – from architectural elements such as solar roofing and triple pane windows, to interior details in lobby and amenities spaces.  "For example, we've seen buyers latch on to sustainably sourced fabrics," Seigle said.

Seigle says that developers need to take advantage of this focus on sustainability and that doing so will entice consumers down the road. Not only will developers benefit, but so will buyers. Buyers realize they are going to save money.

Despite growing interest in sustainability, Seigle says that LEED (Leadership in Energy and Environmental Design) Certification, which provides a framework for highly efficient and cost-saving green buildings, has been less prevalent in residential development. But Seigle believes that consumers will now buy in. "Only recently, has the cost been worth it," he said.

What is promising is that New York City building code now mimics entry-level LEED certification, which Seigle says influences suppliers. Despite some cities in the United States being nowhere close to banning gas, Seigle believes that major cities like Chicago and New York taking action is a game changer.

Ultimately Seigle believes that new development offerings will appeal to new buyers but says developers need to be cautious of greenwashing and not dive too deep into artificial trends, both of which smart buyers see through. 

Brown Harris Stevens is a part of the Destinations by LeadingRE program, which helps developers market their properties and build distribution channels through a network of 550 firms with 136,000 sales associates in over 70 countries worldwide.

Click here to learn more about Destinations by Leading Real Estate Companies of the World.