Real Estate

Go green or go home

By Troy Sympson

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Greg O’Brien
Senior vice president
Transwestern

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According to the U.S. Census Bureau, the world population is rapidly expanding. And, with more people comes more buildings and, more importantly, more use of natural resources.

Now more than ever, the country — and the world — are looking at ways to reduce the use of scarce natural resources. A great way of doing this is by building “green.” Along with this push to “go green,” the LEED (Leadership in Energy and Environmental Design) Green Building Rating System was created by the nonprofit United States Green Building Council as a way to measure the energy efficiency and environmental impacts of various types of buildings.

“A lot is transpiring to create a ‘perfect storm’ for the rapid adoption of LEED-certified green buildings,” says Greg O’Brien, a senior vice president with Transwestern. “Clearly, the risk of not investigating your green alternatives is far greater than the costs of implementing such initiatives.”

Smart Business spoke with O’Brien about green building and why it’s so important in today’s society.

What do you mean by the ‘perfect storm’?

Elements supporting the ‘perfect storm’ concept are the following: concerns around rapidly rising energy costs; increasing regulatory pressures by local, state and federal governments; corporate focus on risk management issues; ‘war for talent’ among knowledge-worker-based employers; and awareness that buildings account for +/-40 percent of greenhouse gas emissions.

The rapid convergence of those elements has created a tsunami-type surge of real estate professionals and investors seeking to understand and apply the LEED standards to new development projects and existing building investments. The USGBC has more than 11,000 member organizations and is approaching 10,000 projects that are registered for LEED certification. There are currently more than 27,000 individuals that have achieved the LEED Accredited Professional (AP) designation from the USGBC, with thousands of real estate professionals annually attending review and implementation courses and working towards becoming LEED AP. The General Services Administration has mandated that all new facility acquisitions under its responsibility achieve at least LEED Silver status, and major corporations are including LEED-related questions in formalized requests for proposals during the real estate acquisition process.

Why should a company go green?

There are considerable economic benefits for going green, the first one generally being the reduction of ongoing operating expenses with no or minimal upfront cost. Also, additional benefits, such as an enhanced ability to attract and retain the best possible labor force and significantly increased worker productivity, are being brought into the equation. And, as the greening of corporations goes deeper, there’s a need to put pressure on the company’s supply chain to go green, which creates a positive impact across the board. Wal-Mart is a prime example as it has strongly recommended that its suppliers and vendors push the envelope with regards to recycling and minimizing waste in the packaging and shipping of products.

What benefits/drawbacks come with green building?

The benefits include reduced energy consumption, reduced potable water usage, increased recycling and reuse of materials, healthier indoor air quality, less reliance on fossil fuels, reduced greenhouse gas emissions, more use of alternative transportation, tax incentives, reduced permitting time, and increased development density. The drawbacks include the perception of higher first costs, the need to change conventional methodology and the additional administrative effort required.

What costs come with going green?

The first question clients and prospects generally ask is: ‘How much more does green cost?’ But considering most business units and operating companies live within budgeting processes, we feel the better question to ask is: ‘How green can we be with the given budget?’ This methodology puts the emphasis on seeking the no-cost and low-cost green initiatives that can be implemented without negatively impacting the budget. Additionally, this perspective helps define which benefits are the ones a company wants to go after and which benefits are less attractive.

However, should one’s goal be to achieve LEED certification, there are additional costs, such as registering the project with the USGBC, certification fees and consulting fees for LEED APs to properly execute the certification process. Also, since commissioning, or fine-tuning a building, is a prerequisite for LEED certification, many people consider this an extra cost to going green. But studies have shown that the proper commissioning of building systems can have the highest return on investment of all green initiatives.

We are finding many institutional owners and corporate tenants are having us perform LEED Audits on buildings to analyze the costs and savings of various green initiatives as well as help them implement ways to reduce their impact on the environment and create better working environments for employees.

GREG O’BRIEN is a senior vice president for Transwestern in Atlanta, working closely with the South Florida office. Reach him at (770) 265-5324 or greg.obrien@transwestern.net.