1 MOTIVATIONS AND TRENDS

Slide header copyIn This Chapter

> Sustainability in commercial property

> Quantitative motivators> Qualitative motivators> Client types

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Slide header copyMarket Size

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> Demand for sustainable properties, certified buildings, green features, and sustainable commercial interiors has grown in last several years

Slide header copyProjected Growth

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Source: Reprinted with permission of McGraw-Hill Construction, Commercial & Institutional Green Building: Green Trends Driving Market Change, New York, NY: McGraw-Hill Construction; 2008.

Slide header copyQuantitative Motivators

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> Use caution when presenting results from studies

> Study of quantitative return from sustainable property is work in progress

> Methodological challenges may produce “outlier” results

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> According to one of largest national studies available, sustainable properties: Gain value at rate similar to or slightly

better than comp. conventional properties

Hold similar or slightly reduced investment risks compared to like properties

Sustainable Property, Value, andInvestment Risk

Source: Pivo, G. and J.D. Fisher. “Investment Returns from Responsible Property Investments: Energy Efficient Transit-oriented and Urban Regeneration Office Properties in the US from 1998-2007,”www.responsibleproperty.net/assets/files/pivo_fisher_10_11_08.pdf

Slide header copyDecreased Operating Costs

> According to EPA and DOE, significant payback is available from low- to medium-cost upgrades: Recalibrating thermostats Relamping with higher efficiency

fluorescent bulbs Changing incandescent bulbs to compact

fluorescent lamps (CFLs) Using ENERGY STAR–labeled equipment

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Slide header copyProjected Cost Savings for Low-cost Changes

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Source: Reprinted with permission of McGraw-Hill Construction, Commercial & Institutional Green Building: Green Trends Driving Market Change, New York, NY: McGraw-Hill Construction; 2008.

Slide header copyThe Win-Win-Win

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> Reduced energy consumption a win-win-win: Increase profit margin for the

owner Bring down costs for tenants Reduce carbon emissions and

conserve natural resources

Slide header copyPayback from Upgrading UAD Systems

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Note that churn cost is cost of replacing employees and includes advertising cost, employee training, and lost productivity

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Improving Efficiency and Saving Costs: Adobe Towers

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Slide header copyDiscussing Payback with Clients

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> Examples of payback may not be replicated in client’s situation.

> Large-scale changes should be energy-modeled for impact on whole building system.

> Changes in efficiency of one system may affect other systems.

> The higher the going-in energy cost, the shorter the payback period.

Slide header copyIncreased Tenant Retention

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> Tenant retention can be quantified for ROI as avoided costs in tenant replacement

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Qualitative Motivators

> Marketing value for corporate clients and tenants

> Employee productivity and health> Lower risk of decreasing

value/obsolescence > Staying ahead of regulation

Slide header copyMarketing Value

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> Market differentiation > Benefit to the financial

performance of the company> Early market entry = long-term

consumer loyalty

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Value of Supporting Productivityand Health

> Reduced absenteeism> Longer term employee loyalty

gains> Increased productivity> Ability to attract and maintain

high quality workers

Slide header copyBuilding Green and Reduced Risk

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> Reduced risk from employee health liability

> Reduced climate change liability> Protection from increases in resource

cost> Protection from sprawl> Reduced risk from future government

regulation

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Examples of Regulation Case Studies

> Seattle > Boston

Sources: Photo of Seattle Public Library reprinted with permission of King County Seattle Public Library, “About the Library,” www.spl.org/default.asp?pageID=branch_central_about&branchID=1. Photo of One Beacon Place Reprinted with permission of CB Richard Ellis. One Beacon Street: One Beacon Is Going Green!, www.1beaconst.com/goinggreen.html.

Slide header copyExercise: Reduced Risk and Sustainability

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> Consider the example of Building Green and Building Blue.

> In the spaces provided, write your answers.