Green building grows as prices continue to slide

Real Estate Weekly,  Oct 17, 2007  by Danielle Wolffe

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Kenneth T. Hamilton, director of facilities and services with the National Audubon Society, recently retold a story about how the organization's old, incredibly environmentally friendly office space played host to a colony of moths which disgruntled staff members regularly killed and presented to him in sealed envelopes.

Hamilton told the story at a Commercial Tenant Real Estate Representation, LTD. panel discussion at the Harvard Club, to illustrate how far green office building has come since the original Audubon House was created by Croxton Collaborative Architects in 1989.

Other panelists agreed. Access to quality green materials and improved design has driven down prices. Methods for measuring rates of return have not yet been set in stone, but company owners have noticed higher rates of productivity and reduced absenteeism in their green office buildings. Professional culture is more apt to promote sustainable offices as these projects gain respect and publicity.

The Audubon Society's experience and the industry's movement towards environmentalism over the 13 years Audubon spent in the building aided tremendously in its choice and design of a new headquarters in a light-filled loft at 225 Varick Street for which it hopes to achieve a LEED silver certification. It is estimated that the new Audubon House will save the organization at least $100,000 per year. The organization considers the premium it is paying to construct the new center (around 15% psf) a drop in the bucket, Hamilton said.

"In 1989, we were struggling to find choices. Going from the old Audubon House to this made the project more feasible, and cheaper. Now we have a wider range of design choices than we ever had before," Hamilton said.

Rick Matilla, director of environmental affairs with Genzyme Corporation--which has created several sustainable office buildings in the Boston, Mass area, including the Genzyme Building--admitted he had no die-hard evidence that employees in green buildings are more productive. However, an informal survey of employees conducted by management at the Genzyme Building before and after green construction found that an overwhelming percentage claimed to be more productive after the new building was created. Matilla concluded that the rate of employee productivity provided a $5 million payback per year on the green building investment.

Furthermore, companies experience with green building makes it more feasible, as every project arcs them higher on the learning curve. Genzyme's newest project, a $100 million six story office building, costs them a less than 2% premium on the overall cost of design and materials, Matilla said. "We can make up that difference in a very short period of time."

Projects gain more resources as the US Green Building Council lends credence to sustainable design and city, state and national governmental bodies offer tax incentives for green building.

Construction professionals are more apt to consider green building as it is more feasible for them. Individual companies are coming up with their own tools to support the management process, such as developing lists of green suppliers and greater specificity about the kinds of products they can use.

"We are not forcing them to reinvent the wheel. We want sustainability to be an integral process on every level," Joseph Lauro, technical director and senior architect with Gensler Architects, which has done work on green building icons such as the Bank of America Tower and the Durst Building at Four Times Square.

Landlords of institutional and commercial buildings are just beginning to use language in their leases specifying tenants must use certain green materials or products in their offices, according to Marisa Manley, president, Commercial Tenant Real Estate Representation, Ltd. Others have been harder nuts to crack. Panelist reveals that corporate tenants like investment bankers who have traditionally equated corner offices with status are often tougher to talk into environmentally sustainable features that run contrary to their culture. "If you suggest a shared open space as an alternative to that, because it is more energy efficient, because open spaces get maximum daylight, you are completely turning that culture upside down," Lauro said.

"At the end of the day, some people are still going to get that corner office even if the rest of the company has interior offices, but there are going to be other people who agree to the open space. It is a shift of opinion that is happening across the board as people become more aware of the benefits of environmentally sustainable building."

COPYRIGHT 2007 Hagedorn Publication
COPYRIGHT 2008 Gale, Cengage Learning