Green Real Estate: An Introduction Source: The Green Revolution by Jerry Yudelson

Origins of the Green Real Estate Movement  1980s: Formation of the Committee on the Environment within the American Institute of Architects  1990s: 20th anniversary of Earth Day (1990) and UN Conference on Environment and Development (a.k.a. Earth Summit, 1992)  Formation of the U.S. Green Building Council (USGBC) in  1980s: Formation of the Committee on the Environment within the American Institute of Architects  1990s: 20th anniversary of Earth Day (1990) and UN Conference on Environment and Development (a.k.a. Earth Summit, 1992)  Formation of the U.S. Green Building Council (USGBC) in 1993.

U.S. Green Building Council  A consensus-based group consisting solely of other organizations: companies, government agencies, schools and universities, nonprofits, trade associations, etc.  From a base of 150 groups in 1998, the USGBC had grown to a size of 7,500 as of early  A consensus-based group consisting solely of other organizations: companies, government agencies, schools and universities, nonprofits, trade associations, etc.  From a base of 150 groups in 1998, the USGBC had grown to a size of 7,500 as of early 2007.

Leadership in Energy and Environmental Design (LEED)  The USGBC unveiled the LEED Green Building System for public use in  LEED was the first rating system to hold commercial projects up for scrutiny for the full range of their effects on energy and water use, municipal infrastructure, transportation energy use, resource conservation, land use, and indoor environmental quality.  Prior to LEED, most evaluation systems (such as the Environmental Protection Agency’s Energy Star program) focused exclusively on energy use.  The USGBC unveiled the LEED Green Building System for public use in  LEED was the first rating system to hold commercial projects up for scrutiny for the full range of their effects on energy and water use, municipal infrastructure, transportation energy use, resource conservation, land use, and indoor environmental quality.  Prior to LEED, most evaluation systems (such as the Environmental Protection Agency’s Energy Star program) focused exclusively on energy use.

The LEED Rating System  LEED uses a point-based rating system that allows vastly different green buildings to be compared in their use of best practices from architecture, engineering, interior design, landscape architecture, and construction.  Every project also has prerequisites that it must meet regardless of certification level. For example, the building must be non- smoking or have a very strict method for containing and exhausting tobacco smoke from the building without contaminating breathing air for non-smokers.  LEED uses a point-based rating system that allows vastly different green buildings to be compared in their use of best practices from architecture, engineering, interior design, landscape architecture, and construction.  Every project also has prerequisites that it must meet regardless of certification level. For example, the building must be non- smoking or have a very strict method for containing and exhausting tobacco smoke from the building without contaminating breathing air for non-smokers.

The LEED Rating System  LEED is a self-assessed third party-verified rating system. Applicants estimate the points for which their project qualifies ad submit their documentation to the USGBC, which assigns an independent reviewer to the project.  The reviewer agrees and awards the points claimed, disagrees and disallows the points, or asks for further information or clarification.  There is a one-step appeal process.  LEED is a self-assessed third party-verified rating system. Applicants estimate the points for which their project qualifies ad submit their documentation to the USGBC, which assigns an independent reviewer to the project.  The reviewer agrees and awards the points claimed, disagrees and disallows the points, or asks for further information or clarification.  There is a one-step appeal process.

LEED Certification Levels  Certified: the project scored more than 40% of the basic, or core, points in the system.  Silver: The project scored more than 50% of the core points.  Gold: The project scored more than 60% of the core points.  Platinum: The project scored more than 80% of the core points.  Certified: the project scored more than 40% of the basic, or core, points in the system.  Silver: The project scored more than 50% of the core points.  Gold: The project scored more than 60% of the core points.  Platinum: The project scored more than 80% of the core points.

Four Major LEED Rating Systems  LEED for New Construction (LEED-NC)  LEED for Core and Shell (LEED-CS)  LEED for Commercial Interiors (LEED-CI)  LEED for Existing Buildings (LEED-EB)  LEED for New Construction (LEED-NC)  LEED for Core and Shell (LEED-CS)  LEED for Commercial Interiors (LEED-CI)  LEED for Existing Buildings (LEED-EB)

LEED for New Construction  The most widely known and used LEED system, which covers all new buildings, major renovations, and housing of 4 stories and above.  Through the end of 2006, about 77% of LEED projects were registered and certified using the LEED-NC system.  The most widely known and used LEED system, which covers all new buildings, major renovations, and housing of 4 stories and above.  Through the end of 2006, about 77% of LEED projects were registered and certified using the LEED-NC system.

Key Factors in Rating a Building under LEED-NC 1.Sustainable sites 2.Water conservation 3.Energy efficiency and atmosphere protection 4.Materials and resource conservation 5.Indoor environmental quality 6.Encourage innovation and integrated design. 1.Sustainable sites 2.Water conservation 3.Energy efficiency and atmosphere protection 4.Materials and resource conservation 5.Indoor environmental quality 6.Encourage innovation and integrated design.

LEED-NC  Emory University’s Whitehead Biomedical Research Lab - first LEED- certified laboratory in the United States

LEED for Core and Shell Buildings  Typically employed by a speculative developer who controls less than 50% of a building’s final improvements.  The developer cannot wait until the building is finished to begin marketing a LEED rating system to prospective tenants, so the LEED- CS system provides important pre- certification and encourages greater green development.  Typically employed by a speculative developer who controls less than 50% of a building’s final improvements.  The developer cannot wait until the building is finished to begin marketing a LEED rating system to prospective tenants, so the LEED- CS system provides important pre- certification and encourages greater green development.

LEED-CS  1180 Peachtree, Atlanta - First LEED-CS-Gold certified project

LEED for Commercial Interiors  Mainly designed for situations in which the base building systems are not changed and in which a tenant takes up only a few floors in a larger building.  Focuses on the factors the tenant can affect such as lighting design, energy-using equipment, lighting control systems, sub- metering, furniture, paints, carpets, etc.  Mainly designed for situations in which the base building systems are not changed and in which a tenant takes up only a few floors in a larger building.  Focuses on the factors the tenant can affect such as lighting design, energy-using equipment, lighting control systems, sub- metering, furniture, paints, carpets, etc.

LEED for Existing Buildings  Originally designed to be a method for assuring accountability of LEED-NC buildings over time.  It has become a stand-alone rating system for building owners who want to benchmark their operations against a nationally recognized standard.  Originally designed to be a method for assuring accountability of LEED-NC buildings over time.  It has become a stand-alone rating system for building owners who want to benchmark their operations against a nationally recognized standard.

Business Benefits of Green Buildings  Savings on energy and water, typically 30-50%.  Maintenance cost reductions.  Increased value from higher NOI  Tax benefits for specific green building investments  Productivity improvements, typically 3-5%.  Health benefits, reduced absenteeism, typically 5% or more.  Risk management benefits including faster lease-up and sales and lower exposure to toxic chemicals in buildings.  Marketing and PR benefits.  Increased availability of debt and equity funding for developers.  Savings on energy and water, typically 30-50%.  Maintenance cost reductions.  Increased value from higher NOI  Tax benefits for specific green building investments  Productivity improvements, typically 3-5%.  Health benefits, reduced absenteeism, typically 5% or more.  Risk management benefits including faster lease-up and sales and lower exposure to toxic chemicals in buildings.  Marketing and PR benefits.  Increased availability of debt and equity funding for developers.

The Costs of Green Buildings: Incremental Capital Cost of 33 LEED-Certified Projects Certification Level Cost Premium Number of projects analyzed Certified 0.66%8 Silver 2.11%18 Gold 1.82%6 Platinum 6.50%1 Average, all certification levels 1.84%