Commercial Real Estate
Save green by going green
How sustainable buildings can increase cost savings and employee productivity
By Chelan David
Smart Business St. Louis | November 2008
The demand for green buildings is
rapidly increasing in the corporate
world. The reasons are numerous.
Sustainable buildings have efficient
operating systems that ultimately result
in cost savings through lower consumption of utilities. Another economic benefit is improved employee productivity.
Data suggest that occupants of green
buildings are healthier and happier than
occupants of traditional buildings,
which correlates to reduced sick time
and diminished turnover. Finally, there
are the environmental advantages such
as resource conservation and improved
water and air quality.
To make a sustainable real estate strategy work, it is crucial to have buy-in and
consistent support from the top of the
organization.
“It is much easier for sustainability to
trickle down through an organization if
management at the highest level is committed to it,” says J Glasgow, senior vice
president, principal, Colliers Turley
Martin Tucker.
Smart Business learned more from
Glasgow about sustainability, the financial benefits that can be achieved from
occupying a green building and how a
company should go about developing a
sustainable real estate strategy.
Why are more and more companies
embracing sustainability?
Over the last 18 months, sustainability
has gained enormous popularity across
not only the real estate industry, but also
society as a whole.
In the commercial real estate industry,
companies are embracing sustainability
because it makes good business sense,
it’s been proven sustainable buildings
operate more efficiently, and employees
who occupy those buildings are more
happy and productive. It’s a healthier
environment with less chemicals,
volatile organic compounds and out-gassing of carpet and new building materials. Ultimately, sustainable buildings
have proven to be a good business
decision.
What specific characteristics make a building sustainable or green?
It’s more than just being green; it’s the
whole approach to a sustainable building, taking in everything from the ecological value to proximity to public
transportation to simple things like having bike racks. The health and wellness
of employees and occupants of a building need to be considered. And, of
course, green buildings should be built
with sustainable materials, utilize
renewable resources and champion
recycling.
What types of financial benefits can be
realized from using a green building?
The biggest benefit is that the building
will operate more efficiently so ultimately costs will be reduced. By having high-efficiency HVAC systems and high-efficiency lighting, energy costs will be
reduced for both the owner and occupant. Secondarily, it has been proven
that productivity rises in employees that
occupy green buildings.
How do the costs of a green building compare to that of a traditional building?
With green buildings we are seeing a
two to 15 percent increase in upfront
costs, depending on the scope of the
project. As expected, a building with
LEED platinum certification will have
increased upfront costs. It is important,
however, to look at the whole life cycle
costs of the building rather than just
upfront costs. For example, we have a
client with a 550,000-square-foot building in Indianapolis, and by going in and
looking at the operations they saved 20
cents a foot on electrical costs alone.
That equates to $110,000 in savings just
from becoming more energy efficient.
How should a company go about formulating a sustainable real estate strategy?
Regardless if you’re going to develop a
green building from the ground up or take
an existing building through the LEED
certification process, it is important to
get your team involved at the beginning.
The team, which includes a LEED expert,
architect, engineer and general contractor, should be assembled at the front end
so upfront costs can be reduced and a
long-term strategy can be developed for
the building. It takes time and money to
make a sustainable real estate strategy
work. Organizations need to be committed, and have dedicated resources.
How do you believe the marketplace for
sustainable buildings will evolve over the
next several years?
We’ve seen dramatic changes over the
past 18 months. On the East and West
coasts, there has been a surge in sustainable buildings and sustainable practices.
The Midwest has been slower to
embrace this movement, but in the
future, I believe that sustainable buildings will become the norm rather than
the exception.
J GLASGOW is a senior vice president and principal for Colliers Turley Martin Tucker. Reach him at (314) 574-7062 or
jglasgow@ctmt.com.
J Glasgow
Senior vice president, principal
Colliers Turley Martin Tucker
