Green Building as Value Engineering

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Presentation to Global Society for Value Engineering annual conference in Portland, OR 2011

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  • To exploit the full capability of our analysis tools, we must transform our design approach from a sequential process – where one discipline completes work and hands off the design to the next – to a collaborative process – where all of the disciplines involved in the building design and construction work as a team from the beginning to evaluate options and optimize the design. When we become involved early in the design process, we have a vastly greater ability to impact cost and functional capabilities while minimizing the cost of changes to design
  • Green Building as Value Engineering

    1. 1. Green Building and Value Engineering Jerry Yudelson Yudelson Associates 2011
    2. 2. Green Building Growth - 33x!
    3. 3. Trends favoring Green Building <ul><li>U.S.: Obama Admin. Focus: energy efficiency/green jobs </li></ul><ul><li>European Union: Energy Performance Labeling </li></ul><ul><li>Global: Corporate social responsibility concerns </li></ul><ul><li>U.S.: Green building momentum since 2000 </li></ul><ul><ul><li>30,000 projects in LEED system </li></ul></ul><ul><ul><li>Over 5 billion sq.ft. </li></ul></ul><ul><li>UK: More than 200,000 BREEAM Buildings </li></ul><ul><li>Global: Green Building Councils in over 70 countries! </li></ul>
    4. 4. Importance of Building Green In the year 2040, 75% of the U.S. built environment will be either new or renovated (300 billion sq.ft.), compared with today. We can transform our energy consumption and CO 2 production by constructing and renovating these buildings to green standards. Source: AIA Research Corporation
    5. 5. The Good News <ul><li>It is still possible to halt CO 2 concentration at 450 ppm (vs. 380 now) by 2040 with concerted effort (and at less than €40 per metric ton) </li></ul><ul><ul><li>No new technologies! </li></ul></ul><ul><li>Buildings are the only Life Cycle Cost-positive solution </li></ul><ul><ul><li>Issue is finance, not economics </li></ul></ul><ul><li>25% of total carbon solution can come from buildings, including homes </li></ul>
    6. 6. Business Case for Green Buildings <ul><li>Financial/economic return </li></ul><ul><li>Risk mitigation </li></ul><ul><li>Ease of financing </li></ul><ul><li>Marketing & PR </li></ul><ul><li>Productivity/health gains </li></ul><ul><li>Recruitment/retention </li></ul><ul><li>Corporate sustainability </li></ul>
    7. 7. Range of Proven Benefits Absenteeism Carbon Emissions Energy Costs Hospital Stays Waste Management Costs Water Usage Performance on School Tests Retail Sales Per Square Foot Factory Productivity Office Productivity Occupancy Rates Rental Rates
    8. 8. Perceived Business Benefits <ul><li>8% to 9% operating cost reduction </li></ul><ul><li>7.5% building value increases </li></ul><ul><li>6.6% improved return on investment </li></ul><ul><li>3.5% increase in occupancy ratio </li></ul><ul><li>3.0% increase in rent </li></ul><ul><li>Source: McGraw-Hill Smart Market Reports, 2007 & 2008 </li></ul>Bentley Prince Street carpet mfg. plant, L.A.
    9. 9. Genzyme Center <ul><li>Biotech company </li></ul><ul><li>Cambridge, MA </li></ul><ul><li>900 employees </li></ul><ul><li>LEED Platinum, 2004 </li></ul><ul><li>Turnover reduced 5%/year </li></ul><ul><ul><li>Value: $2 to $5 million Per Year </li></ul></ul><ul><ul><ul><li>$6 - $11/sq.ft. </li></ul></ul></ul><ul><ul><li>Cost @ 5%: $7.50/sq.ft. </li></ul></ul>
    10. 10. Issue: Early Intervention Adds Value
    11. 11. Solution: The Integrated Design Team
    12. 12. Method: Cost Transfer Away from MEP
    13. 13. Result: Evolutionary Path of Green Building
    14. 14. With VE, Lean Becomes Green <ul><li>Lean Themes </li></ul><ul><ul><li>Reduce carbon footprint </li></ul></ul><ul><ul><li>Eliminate waste </li></ul></ul><ul><ul><li>Build in resiliency </li></ul></ul><ul><li>Going Beyond Green </li></ul><ul><ul><li>Grid independence (mission-critical) </li></ul></ul><ul><ul><li>Net zero energy use </li></ul></ul><ul><ul><li>Net zero water supply </li></ul></ul>
    15. 15. The Future is Green, But… <ul><li>If you want to score, run to where the ball is going, not where it is. </li></ul><ul><li>Ask yourself: how green will buildings and cities be in 2015? </li></ul><ul><li>How can SAVE members participate in the green building revolution? </li></ul>Spain Wins FIFA World Cup 2010
    16. 16. THANK YOU!

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