green x design = value

Green x Design = Value

Tom Hootman, AIA, LEED AP BD+C

RNL, Director of SustainabilityChair, USGBC CO Commercial Real Estate Initiative

Agenda1. Defining Green Building

2. Green Building Marketing Statistics

3. Value of Green Building

4. Case Studies

5. Closing Thoughts

Triple Bottom Line

Green x Design = Value

Metrics

ENERGY STAR Label

EPA and DOE ProgramBased on actual energy use100 point rating system

ENERGY STAR BuildingsDenver Ranks 4th in the Nation

136 Labeled Buildings31.5M Sq Ft$29.6M Cost Savings

Data Source: ENERGY STAR

LEED Certification

USGBC ProgramPerformance basedThird party verified

LEED-CICommercial Interiors

LEED-CSCore and Shell

LEED-CI

LEED-NDNeighborhood Development

LEED-CI

LEED-CS

LEED-CI

LEED-CS

LEED-EBOMExisting Building: Operations & Maintenance

LEED-ND LEED-

EBOM

Registered

27,696

5,462

Certified

LEED ProjectsGlobally – April 2010

Data Source: USGBC

Registered

652

188

Certified

LEED ProjectsColorado – April 2010

Data Source: USGBC

RegisteredCertified

LEED ProjectsColorado – April 2010

LEED-CI45 / 7%

LEED-CS69 / 11%

LEED-EB133 / 20%

LEED School26 /4%

LEED-NC335 / 58%

LEED-CI37 / 20%

LEED-CS23 / 12%

LEED-EB35 / 19%

LEED-NC85 / 45%

LEED SchoolLEED Retail

8 / 4%

xx652188

Data Source: USGBC

Green Market for Commercial Construction

2005

2008

2013

2%10-12%

20-25%

Data Source: McGraw Hill, Green Outlook 2009

2009 LEED Registrations up 40% over 2008

2009 new non-residential starts down 40% over 2007

40%40%

Data Source: Green Market and Impact Report, Rob Watson

Green Market for Commercial Construction

2009 increase in LEED Certified Floor Area over 2008

200%

Life Boat Effect

Mission/ Business

Market

People

Energy/Operations

Adding Value

LEED premium

Average soft costs

LEED Cost Study

Data Source: “Costs and Benefits of LEED-NC in Colorado”, Governor’s Office of Energy, March 2007

1 to 6%

0.8% or $1/SF$2 to 10/SF

Net present value of predicted energy savings

LEED Cost Study

“there is no significant difference in average cost for green buildings as compared to non-green buildings.”

Data Source: : “Cost of Green Revisited”, Davis Langdon, July 2007

Energy Performance

LEED Energy Performance

Source: New Buildings Institute, “Energy Performance of LEED for New Construction Buildings”, March 2008

26% LEED Certified buildings compared to non-LEED buildings

32% LEED Silver buildings compared to non-LEED buildings

44% LEED Gold and Platinum buildings compared to non-LEED buildings

Market Performance

Operating cost decreases13.6%Building value increases10.9%Return on investment improves9.9%Occupancy ratio increases6.4%Rent ratio increases6.1%

Perceived Business Benefits to Green Building

Data Source: McGraw Hill Construction 2008

LEED Market Value

Source: RREEF, “The Greening of US Investment Real Estate”, November 2007

34% Or $10/SF higher rental rates for LEED class A buildings

4.2%Lower vacancy rates for LEED office buildings

2.5%Lower vacancy rates for LEED buildings – all types

LEED Market Value

Source:. CoStar Study, March 2008

37% Or $11.33/SF higher rental rates for LEED buildings

64% Or $171/SF higher sales price for LEED buildings Peer Building Selection Approach)

9% Or $24/SF higher sales price for LEED buildings (Hedonic Model Approach)

Human Performance

44% of C-level executives believe green buildings help attract and retain

employeesSource:. McGraw Hill Construction, 2007 Corporate Real Estate Smart Market Report

Health Benefits

Health BenefitsHealth Benefits

Health Benefits

Productivity

RMI Study – Productivity increase of 6% for improvements in thermal control, lighting, acoustics and indoor quality

USGBC Study – West Bend Mutual Insurance increased productivity by 16% from old building to new green building (a $2m value per year).

Johnson Controls Study- 5 to 15% performance impact related to indoor environmental quality

Source: “The Commercial Real Estate Revolution”

Source: Carnegie Mellon

Office Cost Distribution

Office Cost Distribution

Productivity Value

Business Performance

Managing Risk

Climate / weather events

Energy costs

Mold / toxic buildings

Obsolescence

Corporate Social Responsibility

Green Branding

CSO

Sustainability Leadership

Customer retention and attraction73%Drop in operating costs71%Greater productivity62%Employee retention and recruitment61%More tax incentives39%

Expected Business Benefits from Sustainability Adoption

Data Source:. McGraw Hill, 2009 Greening of Corporate America

Current economic crisis67%Implementation / operational issues

53%Difficulty measuring ROI31%Lack of sufficient tax incentives31%

Organizational issues / lack of leadership

20%

Challenges to Corporate SustainabilityBudget (capital and/or

operational74%

Lack of knowledge base26%Data Source:. McGraw Hill, 2009 Greening of Corporate America

Case Studies

Energy Savings22.6%Water Use Reduction43.6%

1800 Larimer540,000 SF Office + 4,800 SF Retail + 240,000 SF Garage

Recycled Content (Core and Shell)48%

Pursuing LEED-CS Platinum

1800 Larimer

17,000 SF Landscaped Terrace / Green Roof

Under Floor Air Distribution (UFAD)•Energy savings•Increased air quality (38% more fresh air)•Individual thermal control

Access to Transit

1800 Larimer

Next Generation Office Building •Beyond class AA

78% Pre-leased at completion•Xcel Energy (LEED-CI Platinum)

Lower Operational Cost•Energy and Insurance

Higher Rates•Tenants willing to pay more (10-15%)

Energy Savings17.9%Water Use Reduction39.6%

1755 Blake112,725 GSF / 158 Parking Spaces

Recycled Content (Core and Shell)22%

LEED-CS Silver

1755 Blake

Under Floor Air Distribution

Daylighting

Low Emitting Materials and Finishes

Green Amenities – Workout room / showersGreen Housekeeping

1755 Blake

Next Generation Office Building •Appeal to younger workforce

87% Leased 75% Leased when opened

Access to Transit Reduces Parking•Reduces first cost of structured parking

Higher Rates•LoDo and LEED effect

Energy Savings – Net Zero Energy100%Water Use Reduction54.9%

NREL Research Support Facility222,000 SF

Daylight (Regularly Occupied Space)92.0%

Pursuing LEED-NC Platinumand Net Zero Energy

NREL Research Support Facility

Operable Windows

Daylighting

Thermal Mass / Labyrinth

Radiant Heating and Cooling

UFAD Ventilation Air

NREL Research Support Facility

Workplace Design•Open office and low partition height•Design for daylighting and passive energyOccupants and Operation•Occupants interact with building•Wider temperature ranges•Low energy IT

Closing Thoughts

Get Better at Measuring the Value

Closing Thoughts

Demand more from the Commercial Real Estate

Sector

Closing Thoughts

Leverage the power of design