Green buildings now delivering real bottom-line profits.

Developers, property managers and corporate real estate executives face numerous decisions daily. Among today's most common are those involving energy and the environment.

Commercial and residential buildings utilize 65% of the nation's electrical consumption, 36 % of the overall energy use in the United States and are responsible for 30% of the greenhouse gas emissions. As property values and purchase prices continue to rise, the pressure to find value from enhanced building operations and efficiency grows more intense.

Utilities comprise 25-30% of a property's operating costs--a number that is consistently increasing. Global and local infrastructures are already extended in their capacity for providing sources of energy. These pressures constantly expose the industry to increased costs and limited reliability on the delivery of power.

A current trend in property development and management that addresses environmental responsibility is the use of sustainability guidelines based upon individual building practices, location and prioritization of goals that fit the ROI guidelines.

Long thought to be an expensive and idealistic approach that did not apply to cost-effective construction or existing buildings, Green building and implementation of Green opera tions plans are rapidly becoming terrific vehicles to add value, demonstrate environmental consciousness, and provide a product that achieves recognition and improves the output, attitude and health of employees and occupants.

The LEED program (Leadership in Energy and Environmental Design) has three different measurable components that encourage design and development professionals to think differently and achieve recognition for achievement of sustainability goals. The three major programs are LEED-NC (for New Construction), LEED-EB (for Existing Buildings) and LEED-CI (for Commercial Interiors). There are additional programs in development for Core & Shell, Homes and Neighborhood Development.

In new construction, Green design adds less than one percent to construction costs, while providing a return on investment through lower operating costs and increased rental rates. The later in the design process Green practices and goals are initiated, the larger the percentage of the total construction cost the initiatives will require, since each change made because of a new idea or goal typically changes multiple systems within the building.

For existing buildings, owners and tenants can make environmentally-friendly contributions by implementing a number of sustainable initiatives including transportation alternatives, energy procurement, energy conservation, 360[degrees] recycling programs, renewable material specification, air monitoring and thermal systems control.

Efforts like these allow owners and occupants to participate and drive solutions that help alleviate the demand on the world's energy resources and infrastructure while giving employees pride in what they do and who they work for.

This increases productivity and recruiting and makes for better branding in the marketplace. Green buildings with improved employee attendance, increased productivity and proven efforts toward sustainability mean something to potential customers as evidenced by the nearly 40% increase in retail sales at Green locations.

Grubb & Ellis has clients in several locations throughout its property management portfolio who have committed to sustainable initiatives, designed projects to LEED standards and applied for LEED certification. The Tides shared space at 55 Exchange Place in Lower Manhattan is one example.

The Tides shared spaces, a program of the Tides Network, owns 90,000 s/f at 55 Exchange Place for one of its sustainable workspaces for non-profits. The space is home to the Thoreau Center New York. The Center uses a Green, environmentally sustainable architectural plan.

Components include sustainably-harvested wood, non-toxic paints, recycled building materials, energy efficient mechanical systems and Green cleaning supplies.

A Green approach to building maintenance benefits the occupants by improving indoor air quality and minimizing exposure to aggressive chemicals; the service contractor by protecting the environment and the occupants; and the building owner by a strong building reputation and the retention and expansion of quality tenants.

Grubb & Ellis is providing Green Management Services to enhance and support this initiative. The firm was chosen as property manager for 55 Exchange Place because of its commitment to Green operations. It also provides management services to the EPA's Regional Headquarters and Green Building Training Facility in Billerica, MA and a multi-building campus for a Fortune 100 company in the Pacific Northwest.

The concept of Green building is still in its infancy and the real estate and construction industries have only begun to understand the need, the benefit and the costs of providing as many environmentally-friendly locations as possible. As the largest real estate market in the world, New York City and its industry professionals have the opportunity to drive the delivery of LEED-certified projects.

It is incumbent upon this group to realize that the limited resources and infrastructure that serve the city and the world are significantly distressed and that the gap between demand and capacity will only widen as development moves forward.

BY JOHN MCGINLEY 

DIRECTOR OF MANAGEMENT SERVICES

GRUBB & ELLIS NEW YORK