Green x Design = Value

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

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  • Several studies have documented health and economic benefits related to smoking bans. In the first 18 months after Pueblo, Colorado enacted a 2003 smoking ban, hospital admissions for heart attacks dropped by 27% while admissions in neighbouring towns without smoking bans showed no change. The decline in heart attacks was attributed to the smoking ban, which reduced exposure to secondhand smoke.
  • Of the $6 O&M approx. $2/SF is energy
  • Of the $6 O&M approx. $2/SF is energy
  • Green x Design = Value

    1. 1. Green x Design = Value<br />Tom Hootman, AIA, LEED AP BD+C<br />RNL, Director of Sustainability<br />Chair, USGBC CO Commercial Real Estate Initiative<br />
    2. 2. Agenda<br />1. Defining Green Building<br />2. Green Building Marketing Statistics<br />3. Value of Green Building<br />4. Case Studies<br />5. Closing Thoughts<br />
    3. 3. Triple Bottom Line<br />
    4. 4. Green x Design = Value<br />
    5. 5. Metrics<br />
    6. 6. ENERGY STAR Label<br />EPA and DOE Program<br />Based on actual energy use<br />100 point rating system<br />
    7. 7. ENERGY STAR Buildings<br />Denver Ranks 4th in the Nation<br />136 Labeled Buildings<br />31.5M Sq Ft<br />$29.6M Cost Savings<br />Data Source: ENERGY STAR<br />
    8. 8. LEED Certification<br />USGBC Program<br />Performance based<br />Third party verified<br />
    9. 9.
    10. 10. LEED-CI<br />Commercial Interiors<br />
    11. 11. LEED-CI<br />LEED-CS<br />Core and Shell<br />
    12. 12. LEED-CI<br />LEED-CS<br />LEED-ND<br />Neighborhood Development<br />
    13. 13. LEED-CI<br />LEED-CS<br />LEED-ND<br />LEED-EBOM<br />LEED-EBOM<br />Existing Building: Operations & Maintenance<br />
    14. 14. LEED Projects<br />Globally – April 2010<br />27,696<br />5,462<br />Registered<br />Certified<br />Data Source: USGBC<br />
    15. 15. LEED Projects<br />Colorado – April 2010<br />652<br />188<br />Registered<br />Certified<br />Data Source: USGBC<br />
    16. 16. LEED Projects<br />Colorado – April 2010<br />LEED-CI<br />45 / 7%<br />LEED-CS<br />69 / 11%<br />LEED-CI<br />37 / 20%<br />LEED-NC<br />85 / 45%<br />xx<br />652<br />188<br />LEED-NC<br />335 / 58%<br />LEED-CS<br />23 / 12%<br />LEED-EB<br />133 / 20%<br />LEED-EB<br />35 / 19%<br />LEED School<br />LEED Retail<br />8 / 4%<br />LEED School<br />26 /4%<br />Registered<br />Certified<br />Data Source: USGBC<br />
    17. 17. Green Market for Commercial Construction<br />20-25%<br />2013<br />10-12%<br />2008<br />2%<br />2005<br />Data Source: McGraw Hill, Green Outlook 2009<br />
    18. 18. Green Market for Commercial Construction<br />40%<br />2009 new non-residential starts down 40% over 2007<br />40%<br />2009 LEED Registrations <br />up 40% over 2008<br />200%<br />2009 increase in LEED Certified Floor Area over 2008<br />Data Source: Green Market and Impact Report, Rob Watson<br />
    19. 19. Life Boat Effect<br />
    20. 20. VALUE<br />
    21. 21. Adding Value<br />Mission/ <br />Business<br />People<br />Market<br />Energy/<br />Operations<br />
    22. 22. LEED Cost Study<br />1 to 6%<br />LEED premium<br />0.8% or $1/SF<br />Average soft costs<br />Net present value of predicted energy savings<br />$2 to 10/SF<br />Data Source: “Costs and Benefits of LEED-NC in Colorado”, Governor’s Office of Energy, March 2007 <br />
    23. 23. LEED Cost Study<br />“there is no significant difference in average cost for green buildings as compared to non-green buildings.”<br />Data Source: : “Cost of Green Revisited”, Davis Langdon, July 2007 <br />
    24. 24. Energy Performance<br />
    25. 25. LEED Energy Performance<br />26%<br />LEED Certified buildings compared to non-LEED buildings<br />32%<br />LEED Silver buildings compared to non-LEED buildings<br />44%<br />LEED Gold and Platinum buildings compared to non-LEED buildings<br />Source: New Buildings Institute, “Energy Performance of LEED for New Construction Buildings”, March 2008 <br />
    26. 26. Market Performance<br />
    27. 27. Perceived Business Benefits to Green Building<br />13.6%<br />Operating cost decreases<br />10.9%<br />Building value increases<br />9.9%<br />Return on investment improves<br />6.4%<br />Occupancy ratio increases<br />6.1%<br />Rent ratio increases<br />Data Source: McGraw Hill Construction 2008<br />
    28. 28. LEED Market Value<br />34%<br />Or $10/SF higher rental rates for LEED class A buildings<br />4.2%<br />Lower vacancy rates for LEED office buildings<br />2.5%<br />Lower vacancy rates for LEED buildings – all types<br />Source: RREEF, “The Greening of US Investment Real Estate”, November 2007 <br />
    29. 29. LEED Market Value<br />37%<br />Or $11.33/SF higher rental rates for LEED buildings<br />64%<br />Or $171/SF higher sales price for LEED buildings Peer Building Selection Approach)<br />9%<br />Or $24/SF higher sales price for LEED buildings (Hedonic Model Approach)<br />Source:. CoStar Study, March 2008<br />
    30. 30. Human Performance<br />
    31. 31. 44% of C-level executives believe green buildings help attract and retain employees<br />Source:. McGraw Hill Construction, 2007 Corporate Real Estate Smart Market Report<br />
    32. 32. Health Benefits<br />
    33. 33. Health Benefits<br />
    34. 34. Health Benefits<br />Health Benefits<br />
    35. 35. Health Benefits<br />
    36. 36. Productivity<br />
    37. 37. Productivity<br />
    38. 38. RMI Study – Productivity increase of 6% for improvements in thermal control, lighting, acoustics and indoor quality<br />Johnson Controls Study- 5 to 15% performance impact related to indoor environmental quality<br />USGBC Study – West Bend Mutual Insurance increased productivity by 16% from old building to new green building (a $2m value per year).<br />Source: “The Commercial Real Estate Revolution”<br />
    39. 39. Office Cost Distribution<br />Source: Carnegie Mellon<br />
    40. 40. Office Cost Distribution<br />
    41. 41. Office Cost Distribution<br />
    42. 42. Productivity Value<br />
    43. 43. Business Performance<br />
    44. 44. Managing Risk<br />Climate / weather events<br />Energy costs<br />Mold / toxic buildings<br />Obsolescence <br />
    45. 45. Corporate Social Responsibility<br />
    46. 46. Green Branding<br />
    47. 47. Sustainability Leadership<br />CSO<br />
    48. 48. Expected Business Benefits from Sustainability Adoption<br />73%<br />Customer retention and attraction<br />71%<br />Drop in operating costs<br />62%<br />Greater productivity<br />61%<br />Employee retention and recruitment<br />39%<br />More tax incentives<br />Data Source:. McGraw Hill, 2009 Greening of Corporate America<br />
    49. 49. Challenges to Corporate Sustainability<br />74%<br />Budget (capital and/or operational<br />67%<br />Current economic crisis<br />53%<br />Implementation / operational issues<br />31%<br />Difficulty measuring ROI<br />31%<br />Lack of sufficient tax incentives<br />26%<br />Lack of knowledge base<br />20%<br />Organizational issues / lack of leadership<br />Data Source:. McGraw Hill, 2009 Greening of Corporate America<br />
    50. 50. Case Studies<br />
    51. 51. 1800 Larimer<br />540,000 SF Office + 4,800 SF Retail + 240,000 SF Garage<br />Pursuing LEED-CS Platinum<br />22.6%<br />Energy Savings<br />43.6%<br />Water Use Reduction<br />48%<br />Recycled Content (Core and Shell)<br />
    52. 52. 1800 Larimer<br />17,000 SF Landscaped Terrace / Green Roof<br />Access to Transit<br />Under Floor Air Distribution (UFAD)<br /><ul><li>Energy savings
    53. 53. Increased air quality (38% more fresh air)
    54. 54. Individual thermal control</li></li></ul><li>1800 Larimer<br />Next Generation Office Building <br /><ul><li>Beyond class AA</li></ul>78% Pre-leased at completion<br /><ul><li>Xcel Energy (LEED-CI Platinum)</li></ul>Lower Operational Cost<br /><ul><li>Energy and Insurance</li></ul>Higher Rates<br /><ul><li>Tenants willing to pay more (10-15%)</li></li></ul><li>1755 Blake<br />112,725 GSF / 158 Parking Spaces<br />LEED-CS Silver<br />17.9%<br />Energy Savings<br />39.6%<br />Water Use Reduction<br />22%<br />Recycled Content (Core and Shell)<br />
    55. 55. 1755 Blake<br />Under Floor Air Distribution<br />Daylighting<br />Low Emitting Materials and Finishes<br />Green Amenities – Workout room / showers<br />Green Housekeeping<br />
    56. 56. 1755 Blake<br />Next Generation Office Building <br /><ul><li>Appeal to younger workforce</li></ul>87% Leased <br />75% Leased when opened<br />Access to Transit Reduces Parking<br /><ul><li>Reduces first cost of structured parking</li></ul>Higher Rates<br /><ul><li>LoDo and LEED effect</li></li></ul><li>NREL Research Support Facility<br />222,000 SF<br />Pursuing LEED-NC Platinum<br />and Net Zero Energy<br />100%<br />Energy Savings – Net Zero Energy<br />54.9%<br />Water Use Reduction<br />92.0%<br />Daylight (Regularly Occupied Space)<br />
    57. 57. NREL Research Support Facility<br />Operable Windows<br />Daylighting<br />Thermal Mass / Labyrinth <br />Radiant Heating and Cooling<br />UFAD Ventilation Air<br />
    58. 58. NREL Research Support Facility<br />Workplace Design<br /><ul><li>Open office and low partition height
    59. 59. Design for daylighting and passive energy</li></ul>Occupants and Operation<br /><ul><li>Occupants interact with building
    60. 60. Wider temperature ranges
    61. 61. Low energy IT</li></li></ul><li>Closing Thoughts<br />Get Better at Measuring the Value<br />
    62. 62. Closing Thoughts<br />Demand more from the Commercial Real Estate Sector<br />
    63. 63. Closing Thoughts<br />Leverage the power of design<br />

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