Test Market Impacts of Green Building Labeling UC Berkeley December 2, 2009 Doug Gatlin Vice President, Market Development U.S. Green Building Council

What Does a Building Label Do?

Inform Motivate Educate

Barriers to Green Performance in Commercial Real Estate The Broader Context: Lack of standardization Relatively few sales transactions Localized industry – mostly small firms Leasing structures – perverse incentives

Elements of comprehensive approach: Standard Method for Assessing Performance Credible Set of Implementation Guidelines Training and Credentialing of Experts Public Recognition/Disclosure How to Overcome Persistent Barriers?

Hospitality Sector One Industry 20 Brands 160 Green Labels How Not to Do It

 Asset Rating (Design Characteristics)  Operational Rating (Actual Performance)  LEED Uses Both Building Labeling: Two Main Approaches

Performance Criteria + Brand Recognition = Market Adoption Awareness into Action

Familiarity with LEED National Real Estate Investor 2009 Green Building Survey

LEED Market Uptake Year over year Registrations through September 2009 Sector 2008 YTD Reg. Count 2009 YTD Reg. Count Reg. Count Growth over Prior 2008 YTD Reg. GSF 2009 YTD Reg. GSF GSF Growth over Prior LEED CI 7961,06734%41,613,413150,311,020261% LEED CS %251,604,254323,203,46228% LEED EB 1,1701,90363%448,112,112521,152,05816% LEED NC 3,0485,85692%580,013,0151,052,147,47181% LEED Retail (CI) 74763%306,345118,463-61% LEED Retail (NC) %200,9454,226, % Grand Total6,18810,10563%1,349,748,0812,099,392,36056%

Year over Year Growth through September 2009 Sector 2008 YTD Cert. Count 2009 YTD Cert. Count Cert. Count Growth over Prior 2008 YTD Cert. GSF 2009 YTD Cert. GSF GSF Growth over Prior LEED CI %6,179,70315,439,290150% LEED CS %7,749,35436,782,348375% LEED EB %17,402,48190,363,810419% LEED NC %49,273,57479,883,19962% LEED Retail (CI)457976%74,344280,971278% LEED Retail (NC) 47 4,037,229 Grand Total 652 1,564140% 80,679, ,395,967182%

EB vs. NC Growth Comparison More EB projects registered at the end of the 2.5 year period despite starting at a lower position EB crossed 1B GSF after 28 versus 47 months for NC.