The Business Case
for Green Building




                                  © 2012 Yudelson Associates
             Jerry Yudelson
            Yudelson Associates
                 February 2012
Take-Aways

Green building is vital for controlling
global CO2 production

Green building is here to stay
• 45,000 LEED Registered Projects
• 130 countries



Benefits are significant for all
building types




                                                 © 2009 Yudelson Associates
Water saving next major green focus
Green Building Important for Carbon Reduction




                                            © 2009 Yudelson Associates
Life-Cycle-Cost Positive Solution


                                Buildings are the only Life
                                Cycle Cost-positive solution

                                25% of total carbon solution
                                can come from buildings,
                                including homes, stores,
                                offices, hotels, institutional
                                buildings and other
                                structures




                                                                 © 2009 Yudelson Associates
EMGP 270 Paris, HQE Certified
Triple Bottom Line

  Profit
    Financial return
    Marketing & PR
    Higher Productivity
  Planet
    Less carbon, waste and
     energy and water use
  People
    Job satisfaction
    Healthy work environment




                                © 2009 Yudelson Associates
Range of Proven Benefits


                          Absenteeism
    Rental Rates

                        Carbon Emissions
  Occupancy Rates

                          Energy Costs
 Office Productivity

                         Hospital Stays
      Factory
    Productivity
                             Waste
     Retail Sales
                        Management Costs




                                           © 2009 Yudelson Associates
   Per Square Foot

Performance on School     Water Usage
        Tests
Importance of Building Green


By the year 2040, 75% of
U.S. buildings will be
either new or renovated,
vs. 2010 (23 billion m2)
In Eastern Europe, focus
is likely to be more on
greening of interiors,
whole building renovations
and existing buildings.




                                       © 2009 Yudelson Associates
               40 Grosvenor, London
Green Building Is Growing Rapidly




                                © 2009 Yudelson Associates
U.S. Green Building Statistics

                   45,000 LEED registered
                   projects (Jan. 2012)
                   10,000 LEED certified
                   projects (Jan. 2012)
                   175,000+ LEED Accredited
                   Professionals
                   Similar results for UK’s
 OREGON            BREEAM; DGNB gaining
HEALTH & SCIENCE   acceptance




                                              © 2009 Yudelson Associates
      UNIVERSITY
Central/Eastern Europe LEED Activity

   Country           Cumulative LEED          Other Countries
                   Project Registrations
                 (through January 2012)
    Poland                 56                     Bulgaria: 7
   Hungary                 24                     Ukraine: 4
Czech Republic             33
    Austria                17
   Croatia                  9
  Romania                  10
    Serbia                 10
   Slovenia                 2




                                                                       © 2009 Yudelson Associates
   Slovakia                 6
   Estonia                  1                       Nokia Jucu
                                           Factory, Romania, LEED-NC
    Latvia                  1                         Gold
     Total                180
Green Buildings Make Money Sense




                                                           © 2009 Yudelson Associates
Genzyme Corp. Headquarters, Boston, Behnisch Architekten
Business Case for Green

Financial/economic return
Risk management
Marketing/public relations
Productivity and health
Recruitment and retention
Policy directives
Investor interest is high    TNT Express Headquarters
                                   Amsterdam
Sustainability concerns         LEED-NC Platinum




                                                        © 2009 Yudelson Associates
                              Zero Carbon Emissions
Study Results

                            Energy Star
                            Buildings vs. Peers
                              $26/m2 rent premium
                              3.6% higher occupancy
                              Selling +$66/m2
                            LEED Certified
                            Buildings vs. Peers
National Renewable Energy
    Laboratory, Denver        $122/m2 rent premium
 Zero Net Energy Building     4.1% higher occupancy
      LEED Platinum           Selling for +$1870/m2!




                                                        © 2009 Yudelson Associates
LEED Rent Premium

                                  Gross Rents
               Office, 5 stories plus, 200,000 to 1 Million, Multi-tenant
38                                   Source: CoStar


36                                            35.45
               35


34


                                                                                31.97
32   31.36                            31.43            31.25
                      30.99


30
                                                                        28.99            29.07   Energy Star
                                                                                                 LEED
28
                                                                                                 Overall


26




                                                                                                           © 2009 Yudelson Associates
24



22



20
             Q42007                           Q42008                            Q42009
RICS Study Results

                           Based on 2008 Data: 893
                           certified U.S. buildings,
                           10,000 non-certified within
                           0.4-km
                           Conclusions:
                             Effective rent 6% higher
                             Sales price 16% higher
                             Green upgrade adds
                              $5.5 million (€4 million)




                                                          © 2009 Yudelson Associates
Marks & Spencer Plan A
                              to value
Relevance to Central/Eastern Europe


                     Green building worldwide
                        Uptake is rapid
                     Property sector similar in
                     many European countries
                     Global companies want
                     green spaces
Europark Salzburg    Investors want green
Green Retail Space
                     buildings




                                                  © 2009 Yudelson Associates
Great Projects – Begin With Great Goals




Hagaporten 3, Stockholm




                                              © 2009 Yudelson Associates
                          CSOB Bank, Prague
Great Projects – Begin With Great Goals




   Lintulahti, Helsinki




                                            © 2009 Yudelson Associates
                          Solon Corporate
                             HQ, Berlin
Great Projects – Begin With Great Goals




        Wunderlich
Haus, Eberswalde, Germany




                                               © 2009 Yudelson Associates
                            SAP Call Centre,
                            Galway, Ireland
© 2009 Yudelson Associates
Productivity Counts

Most costs are “people
costs”
Studies show 3-7% gain
in workplace productivity
  A 1% gain in
   productivity pays all
   the energy bills
  A 10% gain in
   productivity pays for




                                                   © 2009 Yudelson Associates
   the entire building (or
   the technology)!
Marketing and Public Relations

BREEAM, LEED, DGNB
   Ideal tools
Many European projects
registered under US LEED
Save energy, water, waste
disposal costs
Create green brand
Low-cost options available




                                           © 2009 Yudelson Associates
   RWE Essen, Ingenhoven Architekten
Greening Existing Buildings:
                      The Next Big Challenge

                            63 million m2 certified
                               Largest LEED system
                               International
                               registrations up 22% in
                               2011
Hines, Stuttgart, Germany   Also covers major
LEED Core and Shell Gold    renovations
                               Hines, 26,000 m2




                                                         © 2009 Yudelson Associates
What Does This Mean in Eastern Europe?

   Green certifications add
   value
   Re-brand older spaces
   Large global companies
   want green office space
   Payback/ROI ~1-2 years
   Prevent value erosion of
   existing holdings




                                     © 2009 Yudelson Associates
Water the Next Big Issue




© 2009 Yudelson Associates
Preventing Urban Water Crises

          • Urban water crises are
            likely to increase
          • Good design & practice
            can reduce water use
            +50% in buildings
          • Retrofits can reduce water
            use 35% to 75%




                                         © 2009 Yudelson Associates
Water Design Standards

                       • Control site irrigation &
                         cooling tower water use
                       • Look at entire water cycle
                         – Match quality with end use
                       • U.S. good practice
                         – 600 L/m2/year
                       • Australian best practices:
                         – 400 L/m2/a
                       • German averages:




                                                        © 2009 Yudelson Associates
                         – 200 L/m2/a



Nuremburg, Germany
© 2009 Yudelson Associates
Future of Green Buildings in CEE

                Tenant demand + superior
                environmental performance
                are major driving factors in
                making green buildings
                mainstream. However, stricter
                government regulation in the
                EU is likely to be the main
                reason for green buildings to
                become the de-facto standard
                for new + renovated buildings
                in 10 years.
                --Deutsche Bank




                                                © 2009 Yudelson Associates
                Research, April 12, 2010.
Take-Aways

Green building is vital for controlling
global CO2 production

Green building is here to stay
• 45,000 LEED Registered Projects
• 130 countries



Benefits are significant for all
building types




                                                 © 2009 Yudelson Associates
Water saving next major green focus
The Future is Green, But…


          If you want to score, run
          to where the ball is
          headed, not to where it is.
          Ask yourself and your
          clients: how green will the
          built environment be in
          2015 to 2020?
          Non-performing green
          buildings will pay a




                                        © 2009 Yudelson Associates
          penalty in that market!
Jerry Yudelson
     Yudelson Associates
     February 2012




ОДЛИЧНО!




                           © 2009 Yudelson Associates

The Business Case for Green Building in Serbia

  • 1.
    The Business Case forGreen Building © 2012 Yudelson Associates Jerry Yudelson Yudelson Associates February 2012
  • 2.
    Take-Aways Green building isvital for controlling global CO2 production Green building is here to stay • 45,000 LEED Registered Projects • 130 countries Benefits are significant for all building types © 2009 Yudelson Associates Water saving next major green focus
  • 3.
    Green Building Importantfor Carbon Reduction © 2009 Yudelson Associates
  • 4.
    Life-Cycle-Cost Positive Solution Buildings are the only Life Cycle Cost-positive solution 25% of total carbon solution can come from buildings, including homes, stores, offices, hotels, institutional buildings and other structures © 2009 Yudelson Associates EMGP 270 Paris, HQE Certified
  • 5.
    Triple Bottom Line Profit  Financial return  Marketing & PR  Higher Productivity Planet  Less carbon, waste and energy and water use People  Job satisfaction  Healthy work environment © 2009 Yudelson Associates
  • 6.
    Range of ProvenBenefits Absenteeism Rental Rates Carbon Emissions Occupancy Rates Energy Costs Office Productivity Hospital Stays Factory Productivity Waste Retail Sales Management Costs © 2009 Yudelson Associates Per Square Foot Performance on School Water Usage Tests
  • 7.
    Importance of BuildingGreen By the year 2040, 75% of U.S. buildings will be either new or renovated, vs. 2010 (23 billion m2) In Eastern Europe, focus is likely to be more on greening of interiors, whole building renovations and existing buildings. © 2009 Yudelson Associates 40 Grosvenor, London
  • 8.
    Green Building IsGrowing Rapidly © 2009 Yudelson Associates
  • 9.
    U.S. Green BuildingStatistics 45,000 LEED registered projects (Jan. 2012) 10,000 LEED certified projects (Jan. 2012) 175,000+ LEED Accredited Professionals Similar results for UK’s OREGON BREEAM; DGNB gaining HEALTH & SCIENCE acceptance © 2009 Yudelson Associates UNIVERSITY
  • 10.
    Central/Eastern Europe LEEDActivity Country Cumulative LEED Other Countries Project Registrations (through January 2012) Poland 56 Bulgaria: 7 Hungary 24 Ukraine: 4 Czech Republic 33 Austria 17 Croatia 9 Romania 10 Serbia 10 Slovenia 2 © 2009 Yudelson Associates Slovakia 6 Estonia 1 Nokia Jucu Factory, Romania, LEED-NC Latvia 1 Gold Total 180
  • 11.
    Green Buildings MakeMoney Sense © 2009 Yudelson Associates Genzyme Corp. Headquarters, Boston, Behnisch Architekten
  • 12.
    Business Case forGreen Financial/economic return Risk management Marketing/public relations Productivity and health Recruitment and retention Policy directives Investor interest is high TNT Express Headquarters Amsterdam Sustainability concerns LEED-NC Platinum © 2009 Yudelson Associates Zero Carbon Emissions
  • 13.
    Study Results Energy Star Buildings vs. Peers  $26/m2 rent premium  3.6% higher occupancy  Selling +$66/m2 LEED Certified Buildings vs. Peers National Renewable Energy Laboratory, Denver  $122/m2 rent premium Zero Net Energy Building  4.1% higher occupancy LEED Platinum  Selling for +$1870/m2! © 2009 Yudelson Associates
  • 14.
    LEED Rent Premium Gross Rents Office, 5 stories plus, 200,000 to 1 Million, Multi-tenant 38 Source: CoStar 36 35.45 35 34 31.97 32 31.36 31.43 31.25 30.99 30 28.99 29.07 Energy Star LEED 28 Overall 26 © 2009 Yudelson Associates 24 22 20 Q42007 Q42008 Q42009
  • 15.
    RICS Study Results Based on 2008 Data: 893 certified U.S. buildings, 10,000 non-certified within 0.4-km Conclusions:  Effective rent 6% higher  Sales price 16% higher  Green upgrade adds $5.5 million (€4 million) © 2009 Yudelson Associates Marks & Spencer Plan A to value
  • 16.
    Relevance to Central/EasternEurope Green building worldwide Uptake is rapid Property sector similar in many European countries Global companies want green spaces Europark Salzburg Investors want green Green Retail Space buildings © 2009 Yudelson Associates
  • 17.
    Great Projects –Begin With Great Goals Hagaporten 3, Stockholm © 2009 Yudelson Associates CSOB Bank, Prague
  • 18.
    Great Projects –Begin With Great Goals Lintulahti, Helsinki © 2009 Yudelson Associates Solon Corporate HQ, Berlin
  • 19.
    Great Projects –Begin With Great Goals Wunderlich Haus, Eberswalde, Germany © 2009 Yudelson Associates SAP Call Centre, Galway, Ireland
  • 20.
    © 2009 YudelsonAssociates
  • 21.
    Productivity Counts Most costsare “people costs” Studies show 3-7% gain in workplace productivity  A 1% gain in productivity pays all the energy bills  A 10% gain in productivity pays for © 2009 Yudelson Associates the entire building (or the technology)!
  • 22.
    Marketing and PublicRelations BREEAM, LEED, DGNB Ideal tools Many European projects registered under US LEED Save energy, water, waste disposal costs Create green brand Low-cost options available © 2009 Yudelson Associates RWE Essen, Ingenhoven Architekten
  • 23.
    Greening Existing Buildings: The Next Big Challenge 63 million m2 certified Largest LEED system International registrations up 22% in 2011 Hines, Stuttgart, Germany Also covers major LEED Core and Shell Gold renovations Hines, 26,000 m2 © 2009 Yudelson Associates
  • 24.
    What Does ThisMean in Eastern Europe? Green certifications add value Re-brand older spaces Large global companies want green office space Payback/ROI ~1-2 years Prevent value erosion of existing holdings © 2009 Yudelson Associates
  • 25.
    Water the NextBig Issue © 2009 Yudelson Associates
  • 26.
    Preventing Urban WaterCrises • Urban water crises are likely to increase • Good design & practice can reduce water use +50% in buildings • Retrofits can reduce water use 35% to 75% © 2009 Yudelson Associates
  • 27.
    Water Design Standards • Control site irrigation & cooling tower water use • Look at entire water cycle – Match quality with end use • U.S. good practice – 600 L/m2/year • Australian best practices: – 400 L/m2/a • German averages: © 2009 Yudelson Associates – 200 L/m2/a Nuremburg, Germany
  • 28.
    © 2009 YudelsonAssociates
  • 29.
    Future of GreenBuildings in CEE Tenant demand + superior environmental performance are major driving factors in making green buildings mainstream. However, stricter government regulation in the EU is likely to be the main reason for green buildings to become the de-facto standard for new + renovated buildings in 10 years. --Deutsche Bank © 2009 Yudelson Associates Research, April 12, 2010.
  • 30.
    Take-Aways Green building isvital for controlling global CO2 production Green building is here to stay • 45,000 LEED Registered Projects • 130 countries Benefits are significant for all building types © 2009 Yudelson Associates Water saving next major green focus
  • 31.
    The Future isGreen, But… If you want to score, run to where the ball is headed, not to where it is. Ask yourself and your clients: how green will the built environment be in 2015 to 2020? Non-performing green buildings will pay a © 2009 Yudelson Associates penalty in that market!
  • 32.
    Jerry Yudelson Yudelson Associates February 2012 ОДЛИЧНО! © 2009 Yudelson Associates

Editor's Notes

  • #3 TL: Clarify: Growth is still annual 50% rate in 2009
  • #6 TL: Per: NAED_Western_Region_2009_YudelsonWe could merge this data with the previous slide. Do we need a new photo or was this one ok. It will take some work to generate a new pic, doable, but it takes some time. RRR
  • #15 Animation
  • #31 TL: Clarify: Growth is still annual 50% rate in 2009