green building adoption index
DESCRIPTION
Maastricht University’s Green Building Adoption Index is the first study to quantify the relevance of green building practices in the commercial real estate market. Based on EPA Energy Star and USGBC LEED statistical data from 2005 through 2013 the study examines more than 34,000 buildings totaling more than 3.5 billion square feet in the top 30 U.S. markets. The resulting evidence shows that green has become mainstream in the majority of U.S. cities.TRANSCRIPT
CBRE presents
Green Building Adoption Index 2014June 2014
2© 2014 CBRE
$1,000,000 academic challenge launched in 2012
Developed to support academic work seeking sustainable solutions for the built environment
Provides both funding and active access to CBRE platform, clients and personnel to assist in pursuing projects
Five projects underway: Green Building Adoption Index (GBAI) is first published project
About the Real Green Research ChallengeGREEN BUILDING ADOPTION INDEX
3© 2014 CBRE
Chief objective: quantify and understand the dynamics of certified green building space in the top 30 US markets
Led by Dr. Nils Kok, Maastricht University
collaboration with Rogier Holtermans, Maastricht University
Data provided by USGBC and CBRE Research
3.5 billion square feet
34,000 buildings
About GBAIGREEN BUILDING ADOPTION INDEX
4© 2014 CBRE
Two primary programs assess and identify building energy efficiency and sustainability characteristics for office buildings
EPA Energy Star
• 8,405 office buildings
• 1.9 billion feet
USGBC LEED certification
• 5,470 office buildings
• 970 million feet
About GBAIGREEN BUILDING ADOPTION INDEX
5© 2014 CBRE
Rank State Projects Square footage (million) Per capita sq. ft.1 California 595 72.73 1.95
2 New York 259 37.84 1.95
3 Illinois 171 29.42 2.29
4 Virginia 160 16.87 2.11
5 Colorado 124 8.89 1.77
6 North Carolina 133 17.18 1.80
7 Maryland 119 12.70 2.20
8 Washington, D.C.* 106 19.52 32.45
9 Massachusetts 101 13.68 2.09
10 Minnesota 51 8.21 1.55
LEED ADOPTION PER 2013Top 10 states by number of projects
Source: USGBC, 2014*While D.C. is not a state, its LEED activity warranted inclusion
6© 2014 CBRE
Rank (by projects) State Projects Square footage (million) Per capita sq. ft.1 (8) Washington, D.C.* 106 19.52 32.45
2 (3) Illinois 171 29.42 2.29
3 (7) Maryland 119 12.70 2.20
4 (4) Virginia 160 16.87 2.11
5 (9) Massachusetts 101 13.68 2.09
6 (1) California 595 72.73 1.95
6 (2) New York 259 37.84 1.95
7 (none) Oregon 47 6.99 1.83
8 (6) North Carolina 133 17.18 1.80
9 (5) Colorado 124 8.89 1.77
10 (10) Minnesota 51 8.21 1.55
Source: USGBC, 2014
LEED ADOPTION PER 2013Top 10 states by per capita square footage
*While D.C. is not a state, its LEED activity warranted inclusion
7© 2014 CBRE
ENERGY STAR CERTIFICATIONS IN 2013Top 25 cities with the most certified buildingsRank Metro area # of buildings Square footage (million) Cost savings (million) Emissions prevented1 Los Angeles 443 102.7 $132.2 45,1002 Washington, DC 435 109.1 $119.0 69,8003 Atlanta 318 70.4 $53.4 52,5004 New York 303 113.8 $142.4 58,7005 San Francisco 289 74.7 $110.1 36,4006 Chicago 233 116.2 $91.3 105,9007 Dallas-Fort Worth 229 60.1 $43.9 42,6008 Denver 221 43.5 $40.2 50,2009 Philadelphia 210 34.5 $28.1 21,70010 Houston 204 82.6 $66.4 61,60011 Charlotte 176 23.0 $13.7 11,40012 Phoenix 156 24.2 $34.5 29,80013 Boston 141 38.5 $50.0 19,60014 Seattle 127 25.5 $23.6 13,00015 San Diego 123 17.2 $39.6 7,50016 Minneapolis-St. Paul 116 42.1 $51.4 52,70017 Sacramento 109 15.0 $21.1 7,90018 Miami 101 22.2 $20.7 18,20019 Cincinnati 84 17.2 $11.3 13,60020 San Jose 83 10.7 $17.3 6,50021 Columbus, Ohio 77 12.2 $11.6 12,10022 Riverside, Calif. 75 8.5 $7.2 2,50023 Detroit 73 15.5 $15.6 16,30024 Portland, Ore. 71 11.5 $9.1 5,80025 Louisville 60 6.5 $5.7 6,700
Source: Energy Star, 2014
8© 2014 CBRE
Rank Metro area # of buildings Square footage (million) Cost savings (million) Emissions prevented6 Chicago 233 116.2 $91.3 105,9004 New York 303 113.8 $142.4 58,7002 Washington, DC 435 109.1 $119.0 69,8001 Los Angeles 443 102.7 $132.2 45,10010 Houston 204 82.6 $66.4 61,6005 San Francisco 289 74.7 $110.1 36,4003 Atlanta 318 70.4 $53.4 52,5007 Dallas-Fort Worth 229 60.1 $43.9 42,6008 Denver 221 43.5 $40.2 50,20016 Minneapolis-St. Paul 116 42.1 $51.4 52,70013 Boston 141 38.5 $50.0 19,6009 Philadelphia 210 34.5 $28.1 21,70014 Seattle 127 25.5 $23.6 13,00012 Phoenix 156 24.2 $34.5 29,80011 Charlotte 176 23.0 $13.7 11,40018 Miami 101 22.2 $20.7 18,20015 San Diego 123 17.2 $39.6 7,50019 Cincinnati 84 17.2 $11.3 13,60023 Detroit 73 15.5 $15.6 16,30017 Sacramento 109 15.0 $21.1 7,90021 Columbus, Ohio 77 12.2 $11.6 12,10024 Portland, Ore. 71 11.5 $9.1 5,80020 San Jose 83 10.7 $17.3 6,50022 Riverside, Calif. 75 8.5 $7.2 2,50025 Louisville 60 6.5 $5.7 6,700
ENERGY STAR CERTIFICATIONS IN 2013Ranking changes depending on the measure
Source: Energy Star, 2014
9© 2014 CBRE
Measuring the fraction of green in the CRE market
Geographic boundaries for the 30 largest CBRE markets
Identification of labeled office space per market
GREEN BUILDING ADOPTION INDICESDiffusion of LEED and Energy Star (2005 – 2013)
LEED and Energy Star
• Office only• Tracking threshold• No LEED CI• No medical or government occupied
buildings
Label vintage
• Correct for label “depreciation”• 5 years for LEED• 2 years for Energy Star
Ratios
• Number of buildings• Sq. ft. of space
Developed in partnership with the USGBC and CBRE
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NATIONAL ADOPTION OF LEED AND ENERGY STARSignificant growth over past decade
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NATIONAL ADOPTION OF ENERGY STAR LABELSGrowth in diffusion seems to slow
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NATIONAL ADOPTION OF THE LEED PROGRAMLater start, rapid increase in past five years
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BREAKING DOWN THE DIFFERENT LEED PROGRAMSLEED EB accelerates diffusion
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ADOPTION ACROSS LEED PROGRAMSLEED EB accounts for 75%
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NATIONAL FINDINGS
2005 2013Total sq. ft. of Green buildings 5.6% 39.3%
Total # of Green Buildings 1.5% 13.2%
Total sq. ft. of Energy Star Labeled 5.1% 30.3%
Total # of Energy Star Labeled 1.3% 10.2%
Total sq. ft. of LEED certified .40% 19.4%
Total # of LEED certified .14% 5.1%
Total sq. ft. of LEED EB certified .11% 15.4%
Total # of LEED EB certified .03% 3.1%
16© 2014 CBRE
Highest percentage of green building square footageTOP 10 GREENEST CITIES
Rank Market Square footage1 Minneapolis 77.0%2 San Francisco 67.2%3 Chicago 62.1%4 Houston 54.8%5 Atlanta 54.1%6 Los Angeles 49.7%7 Denver 49.3%8 Seattle 46.6%9 Miami 46.0%10 Washington, D.C. 42.2%
17© 2014 CBRE
Lowest percentage of green building square footageGREEN CHALLENGED CITIES
Rank Market Square footage30 Pittsburgh 10.0%29 Kansas City 13.5%28 Stamford 13.9%27 Detroit 16.3%26 Baltimore 16.9%25 New Jersey 17.2%24 Milwaukee 20.0%23 St. Louis 24.2%22 Tampa 27.0%21 Phoenix 28.0%20 Portland 30.8%
18© 2014 CBRE
Determinants
Regulation: Chapter 47.190’s Commercial Building Rating & Disclosure Ordinance, ≥ 50,000 sq. ft. buildings use Energy Star and water use tracking
Tenant demand: Market values green; deep cultural embedment
Facts
EPA ranking*: 16th
1st LEED building: Karges-Faulconbridge Office Building
LEED EB, Gold, 2004
Interesting building: 7601 Penn Avenue South
10x Energy Star, LEED EB Gold
#1 MINNEAPOLIS
*”Top 25 Cities with the Most ENERGY STAR Certified Buildings” 2014 Note: Green building adoption in percent until December 31, 2013
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#2 SAN FRANCISCO
Determinants
Regulation: Assembly Bill 1103, buildings >5,000 sq. ft. must use Energy Star Portfolio Manager; Existing Comm’l Buildings Energy Performance Ordinance, >10,000 sq. ft. report Energy Star, ASHRAE level 1-2 audits; Green Building Ordinance, 5-25,000 sq. ft. buildings use LEED Checklist; Ordinance N 88-04; Director’s Bulletin
Tenant demand: Fortune 500 HQs; global and national investment target city; technology and financial services industries
Facts
EPA ranking*: 5th
1st LEED building: 260 Townsend, Swinerton HQ
LEED EB, Gold, 2004
Interesting building: 101 California Street
12x Energy Star, LEED EB Certified and Platinum
Note: Green building adoption in percent until December 31, 2013*”Top 25 Cities with the Most ENERGY STAR Certified Buildings” 2014
20© 2014 CBRE
#3 CHICAGO
Determinants
Regulation: Chicago Green Permit Program prioritizes permits and waives fees for projects seeking LEED; Building Energy Use Benchmarking Ordinance requires >50,000 sq. ft. projects to report Energy Star
Tenant demand: Corporate HQs; global investment target city; business services industry
Facts
EPA ranking*: 6th
1st LEED building: 111 South Wacker Drive
LEED CS, Gold, 2005
Interesting building: Union Tower
5x Energy Star, LEED EB Silver
*”Top 25 Cities with the Most ENERGY STAR Certified Buildings” 2014 Note: Green building adoption in percent until December 31, 2013
21© 2014 CBRE
#4 HOUSTON
Determinants
Regulation: Resolution 2004-15, city-owned buildings >10,000 sq. ft. target LEED Silver
Tenant demand: Oil & gas industry offsetting environmental risk; corporate HQ’s
Facts
EPA ranking*: 10th
1st LEED building: Kirksey Corporate Office Building
LEED EB, 2006
Interesting building: Three Allen Center
5x Energy Star, LEED EB Gold
*”Top 25 Cities with the Most ENERGY STAR Certified Buildings” 2014 Note: Green building adoption in percent until December 31, 2013
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#5 ATLANTA
Determinants
Regulation: City funded projects > 5,000 sq. ft. or $2M to be LEED Silver; exemptions follow LEED checklist
Tenant demand: Fortune 500 and other high-profile companies; insurance industry
Facts
EPA ranking*: 3rd
1st LEED building: Arthur M. Blank Family Office
LEED Gold, 2004
Interesting building: Northcreek Office Park Building
20x Energy Star, LEED EB
*”Top 25 Cities with the Most ENERGY STAR Certified Buildings” 2014 Note: Green building adoption in percent until December 31, 2013
23© 2014 CBRE
#29 KANSAS CITY
Determinants
Regulation: Ordinance 110235, all new municipal buildings >5,000 sq. ft. earn LEED Gold
Tenant demand: Lacks sustainably-oriented industries like technology, life sciences, creative industries and government
Facts
EPA ranking*: not ranked
1st LEED building: EcoWorks at Southlake Phase One
LEED NC, 2002
Interesting building: Lighton Plaza and Tower
5x Energy Star, 2x LEED EB Silver
*”Top 25 Cities with the Most ENERGY STAR Certified Buildings” 2014 Note: Green building adoption in percent until December 31, 2013
24© 2014 CBRE
#30 PITTSBURGH
Determinants
Regulation: All Tax Increment Financing and new construction on municipal property ≥10,000 sq. ft. or >$2M must be LEED Silver. Sustainable Development Bonus, 20% density and height bonus for LEED NC or CS certification
Tenant demand: Small technology and creative industry presence; lacks other sustainably-oriented industries
Facts
EPA ranking*: not ranked
1st LEED building: PNC Firstside Center
LEED Silver, 2000
Interesting building: 525 William Penn Place
5x Energy Star, LEED EB
*”Top 25 Cities with the Most ENERGY STAR Certified Buildings” 2014 Note: Green building adoption in percent until December 31, 2013
25© 2014 CBRE
Large geographic variation in adoption of LEED and Energy Star Minneapolis, San Francisco and Chicago are leading
Pittsburgh, Kansas City and Detroit display lowest adoption
Green-certified buildings represent a major share of the office market 13% of office buildings hold a certification compared to just 1.5% in 2005
39% of the stock of office space certified compared to less than 6% in 2005
Technology seems to diffuse faster in larger buildings
Some markets may have reached a saturation point
Markets with overall low adoption show promising growth in adoption of certification for new construction
TAKEAWAYSUnderstanding the supply of green building space
26© 2014 CBRE
Study updated annually
Focus on impacts of:
City/state disclosure rules
Tougher LEED EB IV standards
Updated 2012 EPA Energy Star CBECS data on scores and certification level
Correlate with rents, occupancy and asset value
Update 2007/2010 research
Focus on performance attribution
WHAT’S NEXT?
27© 2014 CBRE
THE GREEN BUILDING ADOPTION INDEXQ & A