| I am not sure about you, but I feel like I can't go | | | | buildings. |
| anywhere without hearing about green building. Don't | | | | Certified 28% |
| get me wrong, I am all for innovating the process to | | | | Silver 30% |
| conserve the environment. I just can't help but | | | | Gold 48% |
| wonder how long the "Green Movement" will last and | | | | Is it worth pursuing the higher LEED levels? I believe |
| what part will stick around for the long term. | | | | that is still up for debate but there are many facts |
| Environmentally friendly is not a new concept. I can | | | | that support building a certified or silver LEED building |
| remember when recycling was introduced and when I | | | | results in costs savings in energy. With the increase |
| used recycled notebook paper for the first time. How | | | | of fuel costs, everyone is looking for ways to save |
| about the grandmother who wraps the presents with | | | | on energy. Another fact that has fueled the demand |
| newspaper, isn't that "green?" Granted, many | | | | for LEED buildings is the occupancy rates. |
| resources that have been widely taken for granted | | | | Occupancy rates, as well as rental and sales rates, |
| are becoming more expensive and in time may just | | | | are typically higher in a LEED building (or energy |
| disappear. Thus we have a need to come up with | | | | efficient) versus a building that is not energy efficient. |
| new technologies and innovations for things like | | | | In the last two years, there has been a 70% |
| energy, but isn't that what we have always done? | | | | increase in the rent charged per square foot in LEED |
| We have a problem and find a solution. | | | | buildings. The increase represents a premium of 36% |
| I attended a local development event recently and a | | | | over a non-LEED building (AIA.org). |
| heavy debate erupted as to whether or not the | | | | Consumer buy-in has become a major factor in the |
| costs of green building could be recouped in an office | | | | green movement. LEED buildings also have a 4.1% |
| building. On one hand, you have the developer saying | | | | higher occupancy rate than the non-LEED buildings. |
| it is almost impossible to rent at a higher rate. The | | | | The chart below highlights some of the difference |
| tenants do not understand the costs savings, nor can | | | | between LEED and non-LEED as well as Energy Star |
| they see a discount or savings on their bill each | | | | and non-Energy Star. |
| month that would equal the amount of increased | | | | Financial Metrics for Green versus Conventional |
| rent. On the other side are developers who say they | | | | Buildings |
| can't lease their space to large fortune 500 | | | | Building type Occupancy rate Rental rate per ft^2 |
| companies or the government without meeting the | | | | Sale price per ft^2 |
| green building certifications. | | | | Energy Star Certified 91.5% $30.55 $288 |
| So, is green always more expensive? Not necessarily | | | | Non-Energy Star peers 87.9% $28.15 $227 |
| says Peter Morris. Morris states that reasonable levels | | | | LEED certified 92.0% $42.38 $438 |
| of sustainable development can be incorporated into | | | | Non-Leed peers 87.9% $31.05 $257 |
| most building types at little or no additional cost. In a | | | | Source: CoStar Group, "Commercial Real Estate and |
| report published by Buildings, the average return on | | | | the Environment"; All Figures are as of first quarter |
| the initial investment for a LEED-certified building is 2.6 | | | | 2008. |
| years. The LEED-certified buildings also had annual net | | | | Does this mean you should go green? I think that |
| savings of more than $170,000. LEED-certified is the | | | | decision rests very much in how you want to serve |
| lowest LEED level a building can earn. | | | | the market. The estimated green construction for |
| I have always heard the lower the level, the lower | | | | this year will only amount to about 2% of the total |
| the investment cost. Just in case you are wondering, | | | | construction for the year, but by 2010 it is estimated |
| according to Beth Anderson to obtain LEED-silver, the | | | | to be as much as 10%. In dollars, that would be |
| building would cost an additional 3.5%, gold would be | | | | equivalent to $29 to $57 billion (CNN Money). |
| an additional 4.5% and platinum would be an additional | | | | No matter what side of the fence you are on, I feel |
| 11.5%. What are the benefits of pursuing a higher | | | | that LEED is here to stay. Over time, the |
| level of LEED designation? | | | | requirements or rules may change, but some form of |
| A study performed in California yielded results of the | | | | our current Green Movement will remain. |
| following energy savings based on current LEED | | | | |