Save on Career Education through Lorman Education
Our readers are offered a discount on Lorman seminars and courses. Check out their business, management and legal offers at this link to qualify for our discounts. They also offer green business training opportunities. Please visit http://www.lorman.com/training/CaliforniaGreenSolutions for a complete listing of courses. Register online or call Lorman at 866-352-9539.
Green Real Estate Survey Calculates National Impact & ROI - by Miller, Spivey, Florance
Green real estate survey results show that green development is a strategic advantage
Green Building Trends 2008
- Non-green buildings are going to become obsolete much faster today.
- The benefits of green are not only the quantifiable but also qualitative (happier workers, more retail sales but also simply doing good by saving resources)
- Standards will evolve over time.
- Conversion to green will accelerate.
- We need more transparency, better standards, more shared best practices and more enlightened government.
Green is not "easy" but it is getting easier.
Dr. Norm Miller, director of academic programs at the University of San Diego’s Burnham-Moores Center for Real Estate, recently published the first nationwide, systematic study that looks at the benefits of investments in energy savings and environmental design.
...the big hurdle is mental!
To calculate the true impact of green building, co-authors Norm Miller, Jay Spivey and Andy Florance conducted the first nationwide, systematic study that looks at the benefits of investments in energy savings and environmental design.
They compared all U.S.-based
- Energy Star office buildings as one measure of "green" building
- LEED-certified office buildings as another measure of "green"
- A large sample of non-Energy Star and non-LEED rated buildings.
Their analysis is significant since, to date, most studies on the benefits of green investment have been case studies, which are seldom the prototypical mean. This study surpassed the one-off case study by beginning with a database of 2.4 million properties before paring it down to a comparable set for the office market.
Developers point out the high indirect costs of dealing with inflexible, uninformed and uncooperative local building code regulators or the lack of local experts and resources. While costs manifested in excess time investment and frustration are more difficult to estimate, they are clearly coming down, and we have every reason to believe that they will continue to decline.
Many of the benefits of green and high-performance buildings may not yet show up in higher base rents in some local markets. The reason is simple: Most of the benefits accrue to tenants, and tenants require proof before they are willing to share in the cost of investments that theoretically will help them be more productive or save money.
Only in very recent years have tenants started to fully appreciate the benefits of cleaner air, more natural lighting and easier to modify spaces.
Extra Costs For Going Green
There is no large sample of cost data on achieving Energy Star ratings nor is there neutrally supplied data on LEED certification—say from contractor samples—but the survey authors did use data supplied by both the USGBC and anecdotal surveys.
According to surveys of those meeting the minimum LEED certification, the average costs are reported to be about three percent extra vs. the zero figure provided by the USGBC.
Considering that most of the benefits are not energy or environmentally related savings, but occupancy benefits, going “green” becomes more than compelling.
Again, while LEED certification does not equate Energy Star ratings, we expect an increasing correlation over time. Yet, we have clearly seen that only minor efforts are required to hit LEED certification at the minimum level once the developer or owner becomes familiar with the process. Silver or Gold ratings are more likely to be needed to achieve truly efficient and user-friendly buildings, which also tend to be higher performance and more adaptable structures.
Green Point LEED Strategies
Talk to several developers successful at securing LEED certification, and they will tell you that with a little planning, it is neither that hard nor costly to hit the minimum point total for certification, which is 26 out of 60 possible points.
Many points are easy, such as designating minimal parking for low emission vehicles and facilitating bike racks. Others, such as teaching construction workers to toss waste into three different bins, are harder, but still feasible.
Contrary to popular opinion, the green movement is not purely public sector-driven.
Tenants like the EPA and others within the federal government are important drivers, but so is the typical public corporation, like IBM, PNC, Toyota and others, today.
The more typical tenants requesting Energy Star ratings, LEED certification or high-performance building features are private, market-based firms. Private developers are leading the way in accommodating this burgeoning demand.
Some investors like CALPERS have recently announced efforts to increase their emphasis on green over the next several years.
Several cities, like Boston an San Francisco, have mandated LEED certification; while others, like Toronto, have provided incentives in the form of rebates for energy conservation methods. A great local incentive that costs cities very little but saves developers significant money is the promise of faster entitlement and permit reviews and/or reduced permit fees.
Barriers to Going Green
The real barriers to going green are mostly a lack of planning and developer education, a lack of knowledge about local vendors and resources or local land use officials who are difficult to work with. Included in this are those who only work to improve business practices when competition forces them to do so.
Culture plays a role, as well, and we see far more environmental leadership in Europe and even Asia than in the United States.
Inexperience also factors in, and just learning where to find the resources to "go green" is a significant hurdle for many newly curious developers. Yet, most who have successfully navigated their way through the process of going green become converts and no longer view the process as difficult.
SOURCE: Read the full article at Green-Technology.org
Norm Miller is a professor and director of academic programs at the University of San Diego’s Burnham-Moores Center for Real Estate. Jay Spivey is senior director of product management at CoStar Group, and Andy Florance is CEO of CoStar Group. They are co-authors of the landmark study. The research slide presentation of data is downloadable at: The Economics of Green
Edited by Carolyn Allen, owner/editor of California Green Solutions