Green by Design equals Value: A presentation for the commercial real estate sector on the value of green buildings.

1. Green x Design = Value Tom Hootman, AIA, LEED AP BD+C RNL, Director of Sustainability Chair, USGBC CO Commercial Real Estate Initiative

2. Agenda 1. Defining Green Building 2. Green Building Marketing Statistics 3. Value of Green Building 4. Case Studies 5. Closing Thoughts

3. Triple Bottom Line

4. Green x Design = Value

5. Metrics

6. ENERGY STAR Label EPA and DOE Program Based on actual energy use 100 point rating system

7. ENERGY STAR Buildings Denver Ranks 4th in the Nation 136 Labeled Buildings 31.5M Sq Ft $29.6M Cost Savings Data Source: ENERGY STAR

8. LEED Certification USGBC Program Performance based Third party verified

10. LEED-CI Commercial Interiors

11. LEED-CI LEED-CS Core and Shell

12. LEED-CI LEED-CS LEED-ND Neighborhood Development

13. LEED-CI LEED-CS LEED-ND LEED-EBOM LEED-EBOM Existing Building: Operations & Maintenance

14. LEED Projects Globally – April 2010 27,696 5,462 Registered Certified Data Source: USGBC

15. LEED Projects Colorado – April 2010 652 188 Registered Certified Data Source: USGBC

16. LEED Projects Colorado – April 2010 LEED-CI 45 / 7% LEED-CS 69 / 11% LEED-CI 37 / 20% LEED-NC 85 / 45% xx 652 188 LEED-NC 335 / 58% LEED-CS 23 / 12% LEED-EB 133 / 20% LEED-EB 35 / 19% LEED School LEED Retail 8 / 4% LEED School 26 /4% Registered Certified Data Source: USGBC

17. Green Market for Commercial Construction 20-25% 2013 10-12% 2008 2% 2005 Data Source: McGraw Hill, Green Outlook 2009

18. Green Market for Commercial Construction 40% 2009 new non-residential starts down 40% over 2007 40% 2009 LEED Registrations up 40% over 2008 200% 2009 increase in LEED Certified Floor Area over 2008 Data Source: Green Market and Impact Report, Rob Watson

19. Life Boat Effect

20. VALUE

21. Adding Value Mission/ Business People Market Energy/ Operations

22. LEED Cost Study 1 to 6% LEED premium 0.8% or $1/SF Average soft costs Net present value of predicted energy savings $2 to 10/SF Data Source: “Costs and Benefits of LEED-NC in Colorado”, Governor’s Office of Energy, March 2007

23. LEED Cost Study “there is no significant difference in average cost for green buildings as compared to non-green buildings.” Data Source: : “Cost of Green Revisited”, Davis Langdon, July 2007

24. Energy Performance

25. LEED Energy Performance 26% LEED Certified buildings compared to non-LEED buildings 32% LEED Silver buildings compared to non-LEED buildings 44% LEED Gold and Platinum buildings compared to non-LEED buildings Source: New Buildings Institute, “Energy Performance of LEED for New Construction Buildings”, March 2008

26. Market Performance

27. Perceived Business Benefits to Green Building 13.6% Operating cost decreases 10.9% Building value increases 9.9% Return on investment improves 6.4% Occupancy ratio increases 6.1% Rent ratio increases Data Source: McGraw Hill Construction 2008

28. LEED Market Value 34% Or $10/SF higher rental rates for LEED class A buildings 4.2% Lower vacancy rates for LEED office buildings 2.5% Lower vacancy rates for LEED buildings – all types Source: RREEF, “The Greening of US Investment Real Estate”, November 2007

29. LEED Market Value 37% Or $11.33/SF higher rental rates for LEED buildings 64% Or $171/SF higher sales price for LEED buildings Peer Building Selection Approach) 9% Or $24/SF higher sales price for LEED buildings (Hedonic Model Approach) Source:. CoStar Study, March 2008

30. Human Performance

31. 44% of C-level executives believe green buildings help attract and retain employees Source:. McGraw Hill Construction, 2007 Corporate Real Estate Smart Market Report

32. Health Benefits

33. Health Benefits

34. Health Benefits Health Benefits

35. Health Benefits

36. Productivity

37. Productivity

38. RMI Study – Productivity increase of 6% for improvements in thermal control, lighting, acoustics and indoor quality Johnson Controls Study- 5 to 15% performance impact related to indoor environmental quality USGBC Study – West Bend Mutual Insurance increased productivity by 16% from old building to new green building (a $2m value per year). Source: “The Commercial Real Estate Revolution”

39. Office Cost Distribution Source: Carnegie Mellon

40. Office Cost Distribution

41. Office Cost Distribution

42. Productivity Value

43. Business Performance

44. Managing Risk Climate / weather events Energy costs Mold / toxic buildings Obsolescence

45. Corporate Social Responsibility

46. Green Branding

47. Sustainability Leadership CSO

48. Expected Business Benefits from Sustainability Adoption 73% Customer retention and attraction 71% Drop in operating costs 62% Greater productivity 61% Employee retention and recruitment 39% More tax incentives Data Source:. McGraw Hill, 2009 Greening of Corporate America

49. Challenges to Corporate Sustainability 74% Budget (capital and/or operational 67% Current economic crisis 53% Implementation / operational issues 31% Difficulty measuring ROI 31% Lack of sufficient tax incentives 26% Lack of knowledge base 20% Organizational issues / lack of leadership Data Source:. McGraw Hill, 2009 Greening of Corporate America

50. Case Studies

51. 1800 Larimer 540,000 SF Office + 4,800 SF Retail + 240,000 SF Garage Pursuing LEED-CS Platinum 22.6% Energy Savings 43.6% Water Use Reduction 48% Recycled Content (Core and Shell)

53. Increased air quality (38% more fresh air)

55. 1755 Blake Under Floor Air Distribution Daylighting Low Emitting Materials and Finishes Green Amenities – Workout room / showers Green Housekeeping

57. NREL Research Support Facility Operable Windows Daylighting Thermal Mass / Labyrinth Radiant Heating and Cooling UFAD Ventilation Air

60. Wider temperature ranges

62. Closing Thoughts Demand more from the Commercial Real Estate Sector

63. Closing Thoughts Leverage the power of design