The Business Case for Green Building<br />Jerry Yudelson<br />Yudelson Associates<br />2010<br />
One “Take Away”<br />  Anyone involved with a new commercial development, university, school or public project today, not ...
The Big Picture (BP)<br />
Green Building Important for Carbon Reduction<br />HOK Architects, LEED-CI Office Toronto<br />
Our Opportunity to Build Green<br />Current US building stock is approx. 300 billion sf.<br />Over the next 30 years:<br /...
 150 billion sf will be new construction</li></ul>Therefore, by the year 2035, three-quarters of building stock <br />will...
Life Cycle Positive Solution<br />Buildings are the only Life Cycle Cost-positive solution<br />25% of total carbon soluti...
Green Building Is Growing Rapidly<br />Smith Carter SC3 Offices, Winnipeg, LEED Platinum<br />
2010 Trends: A Baker’s Dozen + 1<br />
Green Building Statistics<br />USGBC: 16,000+ members<br />LEED Commercial Projects (US)<br />28,000 registered (July 2010...
LEED Growth Slows Down!<br />2005 to 2006: +50% cumulative growth in new LEED registered projects<br />2006 to 2007: +75%<...
LEED Growth - Project Registrations<br />
LEED Growth – Project Certifications<br />
US Green Building Market Projections<br />Source: EL Insights, http://tinyurl.com/2egzhub<br />
Greg Kats: Greening Our Built World <br />14% reduction in CO2, 2025 vs. 2005<br />NPV of green building: $650 billion in ...
Green Buildings Make Money Sense<br />
Business Case for Green<br />Financial/economic return<br />Risk mitigation<br />Marketing/public relations<br />Productiv...
Proven Benefits<br />Absenteeism<br />(15%)<br />Rental Rates<br />(up to 174%)<br />Carbon Emissions<br />(35%)<br />Occu...
LEED Rent Premium<br />
Responsible Property Investing<br />Energy Star properties (U.S.)<br />5.9% higher income per sq.ft.<br />13.5% higher mar...
These are Global Trends<br />“Real estate managers and managers are adopting greener business practices in all regions of ...
Productivity Counts<br />Most costs are “people costs”<br />Studies show 3-7% gain in workplace productivity<br /><ul><li>...
A 10% gain in productivity pays for the entire building (or the technology)!</li></li></ul><li>Making the Business Case<br...
500 tenants in 154 LEED buildings
100 Pine St., San Fran.
55% said: more productive
Average gain: 4.9%
$5,200 value add/employee
$21/sq.ft.
45% said: reduced sick days
Average: 2.88 days less
Value: $5.00/sq.ft.</li></li></ul><li>Genzyme Center-Employee Retention<br />Biotech company<br />900 employees<br />LEED ...
2010 LEED Predictions<br />New buildings: <br />2500 new U.S. LEED project registrations in First Half 2010<br />Recession...
Business Case for a Bad Building?<br />Competitive disadvantage today<br />Will have to disclose energy use in future<br /...
Greening Existing Buildings: The Next Big Challenge<br />Must improve existing buildings to meet carbon reduction goals<br...
LEED-EBOM Registrations<br />
Upcoming SlideShare
Loading in …5
×

Business Case for Green Building in Canada

2,821 views

Published on

Presentation to Build Sask Green conference in Regina, Saskatchewan, Canada, on October 15, 2010

Published in: Business, Technology
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
2,821
On SlideShare
0
From Embeds
0
Number of Embeds
382
Actions
Shares
0
Downloads
96
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide
  • TL: Can we have static slide still readable and printable?
  • Animation
  • Animation
  • Animation
  • TL: Cost – what is the cost?
  • Business Case for Green Building in Canada

    1. 1. The Business Case for Green Building<br />Jerry Yudelson<br />Yudelson Associates<br />2010<br />
    2. 2. One “Take Away”<br /> Anyone involved with a new commercial development, university, school or public project today, not making it as green – and low carbon – as possible, will have a building that’s functionally obsolete the day it opens for business and then economically disadvantaged for its entire lifetime.<br /> Entire building portfolios could become devalued in this time of rapid market convergence to low carbon and green development. This creates both challenges and opportunities for everyone.<br />
    3. 3. The Big Picture (BP)<br />
    4. 4. Green Building Important for Carbon Reduction<br />HOK Architects, LEED-CI Office Toronto<br />
    5. 5.
    6. 6.
    7. 7. Our Opportunity to Build Green<br />Current US building stock is approx. 300 billion sf.<br />Over the next 30 years:<br /><ul><li> 52 billion sf will be demolished</li></ul>Billions of Square Feet<br /><ul><li> 150 billion sf will be remodeled
    8. 8. 150 billion sf will be new construction</li></ul>Therefore, by the year 2035, three-quarters of building stock <br />will be new or renovated vs. 2005<br />
    9. 9. Life Cycle Positive Solution<br />Buildings are the only Life Cycle Cost-positive solution<br />25% of total carbon solution can come from buildings, including homes, stores, offices, hotels, institutional buildings and other structures<br />Choosing Green<br />Choosing Green<br />
    10. 10. Green Building Is Growing Rapidly<br />Smith Carter SC3 Offices, Winnipeg, LEED Platinum<br />
    11. 11. 2010 Trends: A Baker’s Dozen + 1<br />
    12. 12. Green Building Statistics<br />USGBC: 16,000+ members<br />LEED Commercial Projects (US)<br />28,000 registered (July 2010)<br />6,400 certified (July 2010)<br />Ave. size ~ 100,000-sq.ft.<br />LEED Commercial Projects (CA)<br />289 certified (Sept.)<br />2000 registered (Sept.)<br />LEED for Homes (US)<br />6800 certified<br />27,000 registered (July 2010)<br />155,000+ LEED AP’s<br />TELUS House, Ottawa LEED Gold<br />“In God We Trust; All Others Must Bring Data.”<br /> -W. Edwards Deming<br />
    13. 13. LEED Growth Slows Down!<br />2005 to 2006: +50% cumulative growth in new LEED registered projects<br />2006 to 2007: +75%<br />2007 to 2008: +80%<br />2009 to 2010: +70%<br />2010 to 2011: only 10% thru July!<br />New York City<br />LEED: Platinum<br />$1 billion<br />
    14. 14. LEED Growth - Project Registrations<br />
    15. 15. LEED Growth – Project Certifications<br />
    16. 16. US Green Building Market Projections<br />Source: EL Insights, http://tinyurl.com/2egzhub<br />
    17. 17. Greg Kats: Greening Our Built World <br />14% reduction in CO2, 2025 vs. 2005<br />NPV of green building: $650 billion in U.S.<br />5x to 10x cost premium<br />2020 Prediction: <br />Green buildings 95% of new construction<br />Green retrofits are 75% of all retrofits<br />
    18. 18. Green Buildings Make Money Sense<br />
    19. 19. Business Case for Green<br />Financial/economic return<br />Risk mitigation<br />Marketing/public relations<br />Productivity/health gains<br />Recruitment/retention<br />Prevent “value erosion”<br />Sustainability concerns<br />Northfield Stapleton, Denver<br />LEED<br />Silver<br />
    20. 20. Proven Benefits<br />Absenteeism<br />(15%)<br />Rental Rates<br />(up to 174%)<br />Carbon Emissions<br />(35%)<br />Occupancy Rates<br />(3-4.1%)<br />Energy Costs<br />(30%)<br />Office Productivity<br />(2.8-20%)<br />Hospital Stays<br />(2.5 Days)<br />Factory<br />Productivity<br />Waste<br />Management Costs<br />(50-90%)<br />Retail Sales<br />Per Square Foot<br />Performance on School Tests<br />(20%)<br />Water Usage<br />(30-50%)<br />
    21. 21. LEED Rent Premium<br />
    22. 22.
    23. 23.
    24. 24. Responsible Property Investing<br />Energy Star properties (U.S.)<br />5.9% higher income per sq.ft.<br />13.5% higher market values per sq.ft.<br />Slightly higher multiple of net annual income to value<br />Source: Gary Pivo and Jeffrey Fisher, U. of Arizona/Indiana, “Investment Returns from Responsible Property Investments: 1998-2008,” March ‘09<br />
    25. 25. These are Global Trends<br />“Real estate managers and managers are adopting greener business practices in all regions of the world…”<br />Globalization is reinforcing and accelerating these sustainable property development and operating trends”<br />Multi-national corporations and global investment firms are especially important in establishing greener real estate business practices worldwide through their tenancy and investment criteria”<br />Major corporate tenants are seeking greener facilities, to attract and retain workers, differentiate their products, improve image and satisfy stakeholder demands…”<br />Source: “Globalization and Global Trends in Green Real Estate Investment,” RREEF Research/Deutsche Bank, September 2008. <br />
    26. 26. Productivity Counts<br />Most costs are “people costs”<br />Studies show 3-7% gain in workplace productivity<br /><ul><li>A 1% gain in productivity pays all the energy bills
    27. 27. A 10% gain in productivity pays for the entire building (or the technology)!</li></li></ul><li>Making the Business Case<br /><ul><li>2009: CBRE/U. San Diego
    28. 28. 500 tenants in 154 LEED buildings
    29. 29. 100 Pine St., San Fran.
    30. 30. 55% said: more productive
    31. 31. Average gain: 4.9%
    32. 32. $5,200 value add/employee
    33. 33. $21/sq.ft.
    34. 34. 45% said: reduced sick days
    35. 35. Average: 2.88 days less
    36. 36. Value: $5.00/sq.ft.</li></li></ul><li>Genzyme Center-Employee Retention<br />Biotech company<br />900 employees<br />LEED Platinum, 2004<br />360,000 ft2corporate HQ<br />Turnover reduced 5%/year<br />Value: $2 to $5 million Per Year (or $5.60 to $14 per ft2)<br />Contrast with green cost premium<br />
    37. 37. 2010 LEED Predictions<br />New buildings: <br />2500 new U.S. LEED project registrations in First Half 2010<br />Recessionary impact<br />2100 new project certifications<br />Value of new LEED project registrations in 2010: >$35 billion<br />Child Development Centre, University of Calgary, LEED Platinum<br />
    38. 38. Business Case for a Bad Building?<br />Competitive disadvantage today<br />Will have to disclose energy use in future<br />Liability for sick building syndrome?<br />Lower productivity?<br />Health hazard?<br />Value erosion in future?<br />Manitoba Hydro Place Winnipeg<br />
    39. 39. Greening Existing Buildings: The Next Big Challenge<br />Must improve existing buildings to meet carbon reduction goals<br />Very cost-effective to cut energy/water use by 30% to 40%<br />Many outstanding examples nationwide<br />Oxford Centre, Toronto<br />LEED-EB Silver, 2008<br />
    40. 40. LEED-EBOM Registrations<br />
    41. 41. Direct Economic Benefits – Greening Existing Buildings<br />
    42. 42. Greening Existing Buildings: Next Big Challenge<br />Need to green existing building stock rapidly<br />Over 4,800 LEED-EBOM buildings registered<br />Avg.: 300,000-sq.ft.<br />40 in Canada, only 7 Certified<br />Example: CBRE<br />100 buildings certified<br />Example: Chicago Merchandise Mart<br />4 million-sq.ft.<br />Merchandise Mart, Chicago<br />LEED-EB Silver<br />
    43. 43. Case Study: Empire State Building<br />Built 1931; 2.8m sq.ft.<br />Key Outside Players: <br />Jones Lang LaSalle<br />Johnson Controls<br />Clinton Climate Initiative<br />Completion: late 2012<br />All projects<br />38% expected energy savings<br />$4.4 Million Savings!<br />Goal: LEED-EB Gold<br />
    44. 44. Water Use Concerns Growing…<br />Urban water concerns are likely to increase<br />Good design & practice can reduce water use +50% in buildings<br />Retrofits can reduce water use 35% to 75%<br />Australia is the case study, the testing ground<br />150 liters/capita/day<br />U.S: 150 gallons/cap/day!<br />
    45. 45. The Future is Green, But…<br />If you want to score, skate to where the puck is headed, not to where it is now.<br />Ask yourself: how green will the built environment be in 2015? What will be the New Normal?<br />Poorly performing buildings will pay a penalty in that market!<br />
    46. 46. Conclusions?<br />Green building is here to stay<br />Pace of adoption is rapid in schools, existing buildings<br />Green buildings & homes<br />Renewable energy & efficiency go with green building<br />Still concern over actual building performance<br />This will be addressed in next 3 to 5 years<br />Building management will use “cloud”: SaaS<br />Focus shifting rapidly to greening existing buildings<br />Opportunities abound for nimble companies<br />
    47. 47. Take-Aways<br />
    48. 48. Jerry Yudelson<br />Yudelson Associates<br />August 2010<br />THANK YOU!<br />
    49. 49. Further Resources<br />Books by Jerry Yudelson:<br />Dry Run: Preventing the Next Urban Water Crisis (2010)<br />Greening Existing Buildings (2009)<br />Sustainable Retail Development: New Success Strategies (2009)<br />Green Building Trends: Europe (2009)<br />Green Building through Integrated Design (2008)<br />Choosing Green: The Home Buyer’s Guide to Good Green Homes (2008)<br />Green Building: A to Z (2007)<br />The Green Building Revolution (2007)<br />Marketing Green Building Services: Strategies for Success (2007) <br />

    ×