The 2010 U.S. Green Building Market
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Transcript of The 2010 U.S. Green Building Market
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Jerry YudelsonYudelson Associates
2010
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Jerry Yudelson
• Green building involvement with USGBC since 1997
• Author of 12 books on green building subjects since 2005
• Technical/Marketing Consultant to Fortune 500 companies, real estate investors, software companies, manufacturers and design/construction firms
• Trained 3500 people in the LEED system since 2001; former USGBC Board member
• Organized and chaired Greenbuild, largest US Green Building conference and expo, 2001-2009
• Research scholar for retail real estate sustainability, International Council of Shopping Centers
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Take-Aways
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The Big Picture (BP)
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Green Building Important for Carbon Reduction
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Importance of Building Green
In the year 2035, 75% of 2005’s U.S. built environment will be either new or renovated.
The U.S. will transform its energy consumption and CO2 production by constructing & renovating most buildings to green standards.
McDonalds Corp. HQ
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Our Opportunity to Build Green
Current US building stock is approx. 300 billion sf.
Over the next 30 years:
• 52 billion sf will be demolished• 150 billion sf will be remodeled• 150 billion sf will be new construction
Therefore, by the year 2035, three-quarters of building stock will be new or renovated vs. 2005
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Life Cycle Positive Solution
Buildings are the only Life Cycle Cost-positive solution
25% of total carbon solution can come from buildings, including homes, stores, offices, hotels, institutional buildings and other structuresChoosing GreenChoosing Green
Choosing Choosing GreenGreen
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Green Building Is Growing Rapidly
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Green Building Statistics
USGBC: 18,000+ members
LEED Commercial Projects
28,000 registered (July 2010)
6,000 certified (July 2010)
Ave. size ~ 100,000-sq.ft.
LEED for Homes
6800 certified, 27,000 registered (June 2010)
155,000+ LEED Accredited Professionals
OREGON
HEALTH & SCIENCEUNIVERSITY
“In God We Trust; All Others Must Bring Data.”-W. Edwards Deming
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LEED Growth Accelerates!
2005 to 2006: +50% cumulative growth in new LEED registered projects
2006 to 2007: +75%
2007 to 2008: +80%
2009 to 2010: +70%
New York City
$1 billion
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LEED Growth - Project Registrations
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LEED Growth – Project Certifications
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LEED-New Construction Registrations
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US Green Building Market Projections
Source: EL Insights, http://tinyurl.com/2egzhub
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Business Case for Green
Financial/economic return
Risk mitigation
Marketing/public relations
Productivity/health gains
Recruitment/retention
Sustainability concerns
Northfield Stapleton, DenverLEED
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Proven Benefits
Absenteeism(15%)
Carbon Emissions(35%)
Energy Costs(30%)
Hospital Stays(2.5 Days)
WasteManagement Costs
(50-90%)
Water Usage(30-50%)
Performance on School Tests
(20%)
Retail SalesPer Square Foot
FactoryProductivity
Office Productivity(2.8-20%)
Occupancy Rates(3-4.1%)
Rental Rates(up to 174%)
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CoStar Study Results
Energy Star Buildings vs. Peers (~1,000)
$2.40/sf Rent Premium!
3.6% Higher Occupancy!
Selling for $67/sqm more!
LEED Certified Buildings vs. Peers (~360)
$11.33/sf Rent Premium!
4.1% Higher Occupancy!
Selling for $1870/sqm more!
Clinton Presidential Library, Little RockLEED Platinum
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LEED Rent Premium
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RICS Study Results
2008 Data: 893 certified
buildings, 10,000 non-
certified within ¼ mile
Conclusions: Effective rent 6% higher Sales price 16% higher Green upgrade would
add $5.5 million to average value
MarksMarks && Spencer Spencer Plan APlan A MarksMarks && Spencer Spencer Plan APlan A
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Most costs are “people costs”
Studies show 3-7% gain in workplace productivity
A 1% gain in productivity pays all the energy bills
A 10% gain in productivity pays for the entire building (or the technology)!
Productivity Counts
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2010 LEED Predictions
• New buildings: – 10,000+ new LEED
project registrations– 2000 new project
certifications– Value of new LEED
project registrations in 2010: $100 to $150 billion
Global Ecology Center, Stanford University
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Greening Existing Buildings: The Next Big Challenge
Must improve existing buildings to meet carbon reduction goals
Very cost-effective to cut energy/water use by 30% to 40%
Many outstanding examples worldwide
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LEED-EBOM Registrations
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Greening Existing Buildings: Next Big Challenge
• Need to green existing building stock rapidly
• Huge opportunities, many challenges
• Over 4,100 LEED-EB buildings registered– Avg.: 300,000-sq.ft.
• Example: CBRE– 100 buildings certified
• Example: Chicago Merchandise Mart– 4 million-sq.ft. Adobe Systems HQ, San Jose, CA, 1 million-
sq.ft.LEED-EB Platinum
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Empire State Building
Key Players: Jones Lang LaSalleJohnson ControlsClinton Climate Initiative
Completion: late 2012All projects
38% expected energy savings$4.4 Million Savings!Goal: LEED-EB Gold
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Urban Water Use
• Urban water concerns are likely to increase
• Good design & practice can reduce water use +50% in buildings
• Retrofits can reduce water use 35% to 75%
• Australia is the case study, the testing ground– 150 liters/capita/day– U.S: 150 gallons/cap/day!
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Greg Kats: Greening Our Built World
• 14% reduction in CO2, 2025 vs. 2005
• NPV of green building: $650 billion in U.S.– 5x to 10x cost premium
• 2020 Prediction: – Green buildings 95% of
new construction– Green retrofits are 75%
of all retrofits
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6 Good (Green) Marketing Ideas
• Differentiate your offerings• Become a low-cost provider of
products for zero-carbon projects– Tout UK/EU experience
• Educate the market– Use available Eco-Labels
• Bundle green features– create branded efficiency, green or
renewable products/systems
• Present the business case better– Show full suite of user benefits
• Become a green brand– Existing buildings opportunity
Helena Apartments, New York City LEED Gold
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The Future is Green, But…
If you want to score, run to where the ball’s headed, not to where it is now.
Ask yourself: how green will the built environment be in 2015? What will be the New Normal?
Non-performing green buildings will pay a penalty in that market!
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Conclusions?
• Green building is here to stay– Pace of adoption is accelerating– Green buildings & homes– Renewable energy & efficiency go with green building
• Still concern over actual building performance– This will be addressed in next 3 to 5 years– Buildings will fully integrated using “cloud”: SaaS
• Expect more green mandates (+200 jurisdictions now)
• Focus shifting to greening existing buildings
• Opportunities abound for nimble companies
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Take-Aways
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Jerry YudelsonYudelson AssociatesMay 2010
THANK YOU!
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Further Resources
Books by Jerry Yudelson:
Dry Run: Preventing the Next Urban Water Crisis (2010)
Greening Existing Buildings (2009)
Sustainable Retail Development: New Success Strategies (2009)
Green Building Trends: Europe (2009)
Green Building through Integrated Design (2008)
Choosing Green: The Home Buyer’s Guide to Good Green Homes (2008)
Green Building: A to Z (2007)
The Green Building Revolution (2007)
Marketing Green Building Services: Strategies for Success (2007)