2024 Drivers of Change

Summer in the (resilient) city

At a glance:

  • Extreme heat events are surging, and our cities are seeing some of the worst impacts. The urban heat island effect is amplifying the impacts of heat waves and wreaking havoc on the built environment and the health of city dwellers.
  • The CRE industry faces significant risk and rising costs – for both occupiers and tenants – in the face of rising temperatures. Increased energy use and cooling costs are the common culprits of rising bills.
  • However, there are effective mitigation strategies that can be employed by both the public and private sector. Designing new developments to utilize cooling materials, retrofitting existing properties, and introducing ‘green building codes’ are the key ingredients to make our cities resilient.

Things are heating up in cities across the world – and we aren’t just referring to that hot new brunch spot everyone’s talking about. Phoenix endured a record-breaking 31 days of temperatures above 110°F (43°C) in the summer of 2023. Houston had 45 days of triple-digit temperatures the same year. By 2050, close to 1,000 cities will experience average summer highs of 95°F (35°C), nearly triple the current number, according to the World Economic Forum.

Rate of temperature change in the United States, 1901-2021 Chart displaying how different aspects of the local environment affect temperatures Developed by the U.S. EPA Office of Air and Radiation, this content item shows how annual average air temperatures have changed in different parts of the United States since the early 20th century (since 1901 for the contiguous 48 states and 1925 for Alaska). The data are shown for climate divisions, as defined by the National Oceanic and Atmospheric Administration (2021). For more information, please visit the U.S. EPA climate change indicators webpage. These data and their corresponding metadata records can be downloaded from Data.gov. Heatwave frequency in the United States by decade, 1961–2021
Source: NOAA, 2022

Blame the ‘urban heat island’ effect, which makes cities hotter than their rural counterparts.

It occurs when concrete, asphalt, and dense city infrastructure absorb sunlight and trap heat, increasing temperatures by several degrees. And it isn’t just physical infrastructure that makes cities sweltering. Our activities within cities produce – and trap – additional heat through car emissions and waste heat from HVAC units. 

Unmitigated by the abundant vegetation that naturally cools the countryside, cities are becoming cauldrons of contained warmth. However, the heat island effect does not affect all neighborhoods equally. Dense downtown corridors with little access to greenery are typically hit the hardest.

Effects of the built environment on local temperatures Chart displaying how different aspects of the local environment affect temperatures The hatched portions of the bars show how the effects of warming or cooling of each factor vary depending on the local climate context.
Source: Intergovernmental Panel on Climate Change (IPCC)
The urban heat island effect Illustrative graph visualizing the impacts of the urban heat island effect on different types of built environments The figure illustrates temperature fluctuations across natural and built environments in a typical late afternoon in the summertime.
Source: Heat Island Group, Lawrence Berkeley National Laboratory

Global temperatures overall have increased faster in the past 50 years than at any time in the past 2,000 years–at minimum. The more the global temperatures rise, the greater the heat island impact. The good news, however, is that mitigation strategies such as installing cool roofs and increasing the tree canopy in cities can not only lower heat island temperatures, but also lower the greenhouse gas emissions that cause climate change. 

Climate change is happening now in all regions of the U.S. visualization of which states are experiencing what kinds of impacts as a result of climate change Each additional increment of warming leads to greater risks to water supply, food security, infrastructure, health and well-being, ecosystems, economy, livelihoods, and heritage.
Source: The Fifth National Climate Assessment from the U.S. Government
Without deeper cuts in global net emissions, climate risks to the U.S. will continue to grow
A person born in North America in 2020 will experience more climate hazards during their lifetime, on average, than a person born in 1965.
Source: The Fifth National Climate Assessment from the U.S. Government

“The threat of heat islands worsening is prompting CRE stakeholders to seek mitigation strategies,” said Dominic Perry, CCIM, a tenant representation broker specializing in industrial and office in our Phoenix office.

“Urban heat islands pose serious risks to tenants’ health and the physical integrity of buildings,” said Perry, who was also involved in heat mitigation and sustainability discussions during his decade as a Board Member for the City of Mesa’s Economic Development Advisory Board.

Unmitigated heat islands can strain our healthcare systems with illnesses like heat stroke, dehydration, and exhaustion. “The health risks are especially high for people with respiratory illnesses and other vulnerabilities,” Perry said. “Sensitive populations live and work in commercial buildings, making mitigation critical.”

Too much heat is not a highly-desired office amenity

Extreme heat can also make us less productive in the workplace and impact our physical and mental health, particularly in inadequately ventilated buildings. The New York Times recently reported on productivity losses related to heat exposure, citing more than 2.5 billion lost hours in productivity across sectors in 2021, and projected cost to the U.S. economy of more than $500 billion annually by 2050.

It’s simply unpleasant to work through heat like this, and as such, also works against companies’ efforts to incentivize return to office. “If workers are more comfortable in their homes, they are not going to prefer the office,” Perry said.

And it’s not just about whether an office is adequately air-conditioned, it’s about the holistic employee experience. “When they park their car, are trees shading their walk?” Perry said. “Can they get lunch from an on-site retail vendor in the shade? These are the questions CRE leaders need to consider.”

Properties face thermodynamic threats

Heat islands strain buildings’ HVAC systems. They increase energy use in buildings by 1-9% for every two-degree temperature increase, according to the U.S. Environmental Protection Agency (EPA). The increased HVAC use has cost implications for building owners and tenants. Increased cooling costs building owners US $479 million annually for a three-degree increase, a 2013 study found. “As increased HVAC use strains power grids, the risk of outages also increases,” Perry said.

Heat islands can start to melt buildings made from the wrong materials. High temperatures and ultraviolet exposure can warp and weaken roofing materials and deteriorate sealants. Both the humidity that often accompanies extreme heat and the vapor that offloads from cooling systems can cause moisture damage.

“To reduce these risks, CRE stakeholders must prioritize increasing their buildings’ resilience in the face of extreme heat,” Perry said.

How can we design new developments to withstand extreme heat?

Developers, investors, and architects planning ground-up commercial buildings have the unique ability to combat the heat island effect through design. 

Passive cooling in buildings section illustration of a building designed for passive cooling Advanced design architecture offers improved cooling performance.
Source: United Nations Environment Programme

The design solution for heat resilient buildings might lie in a passive approach – one that entered the architecture scene around 1300 BCE via Arabian wind catchers called Barajeels. Passive design, which optimizes a building’s orientation, shape, and materials for natural light and temperature regulation, reduces temperatures when it’s hot and stores heat when it’s cold. These passive cooling techniques can reduce a building’s energy consumption by up to 70 percent, reducing reliance on HVAC systems, according to a 2021 study.

Site selection is integral to passive cooling: developers can choose properties where the sun’s angle is less likely to cause excessive indoor heat, as can tenants when they search for space.

Here are some passive design strategies to counteract extreme heat:

  • Reflective building materials: These reduce heat retention. Installing white roofing can lower indoor temperatures by up to 5 degrees Celsius (9 degrees Fahrenheit). The roof of the supertall One Vanderbilt in New York City has a white reflective coating that reduces energy consumption.
  • Airflow-centric design: Airflow cools. Some designers of supertall buildings in Chinese coastal cities use open base floors to create openings that allow cooling sea breezes to circulate.
  • Green walls: Foliage is not to be underestimated. Plants absorb heat and convert it into vapor, which cools. At Singapore’s Parkroyal On Pickering Hotel, lush foliage is built into roughly 161,500 square feet of the building’sexterior. This ‘green wall’ adds insulation and cools the building.
  • Cool Roofs: Also called ‘green roofs,’ these feature reflective coatings like white paint or foliage to reduce heat absorption. Chicago’s City Hall features a rooftop garden that cools the structure.

While beneficial, the possibility of passive design is limited as our cities are thoroughly developed. Appropriate sites are few and far between. Therefore, heat-mitigating retrofits will be key for keeping our properties viable.

One compelling solution: equipping existing structures with cool roofs. Simply installing white roofing that reflects heat and can lower indoor temperatures by up to 5 degrees Celsius (9 degrees Fahrenheit).

Amplifying these effects outside the structure with cool pavements made of reflective materials and strategic tree planting can improve air quality, enhance the tenant experience, and prevent building damage.

"From Phoenix to Liverpool, cities and real estate leaders are informing policies and implementing innovative solutions to manage and adapt to evolving risks due to heat and other climate impacts such as floods, drought, wild fires, smoke, hurricanes, hail, and (eventually) sea level rise. With change comes new approaches, new metrics, new expertise, and new partners—we are hopeful that the future of our places will lead to better climate risk management, increased adaptability and community resilience."

- Brandy Burdeniuk, Director, ESG, North America, Avison Young

headshot of Brandy Burdeniuk, Director, ESG, North America, Avison Young

Cities are starting to act

While CRE strategies are valuable, public-sector efforts and public-private partnerships can have a larger-scale impact.

That’s because the most impactful solutions, including aggressive tree planting and creating urban parks, are not minor feats. They often require rezoned land, decades-long construction plans, and commitments to stewardship that outlast the current government administration.

“Trees can live for hundreds of years, which makes a stewardship plan essential,” Perry said.

Mesa, Arizona, is planting one million trees by 2050. The city needed to find a solution as they continue to experience some of the highest temperatures in the US.

“Any meaningful climate action plan in Mesa, Arizona must address heat mitigation, and trees have a significant role to play in providing shade, keeping temperatures low, and filtering greenhouse gas emissions,” said Mesa Mayor John Giles.

Some cities are building solutions into their building requirements. ‘Green building codes,’ such as San Francisco’s CALGreen, which requires cool roofs in certain climate zones and a minimum percentage of vegetation that provides shading. Other cities have taken notice of San Francisco’s heat mitigation measures, with Los Angeles also adopting CALGreen.

The need for heat-resistant cities will only continue to increase as climate change continues to cause frequent heat waves. Our industry needs to work across all sectors to make cities heat resilient.

“The only way we’ll be successful in reaching our goals... is if everyone gets involved,” – Mayor Giles.

For more information, contact:

  • Associate
  • Industrial, Office, Sustainability / Energy / Environmental, Tenant Representation

  • Principal, Global Director, ESG
  • Sustainability / Energy / Environmental

  • Director, ESG, North America
  • Sustainability / Energy / Environmental

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