Here to Stay: Sustainable Buildings

By Jeff Gavin | Jul 15, 2017




The accelerating adoption of green building practices may transform sustainable construction from movement to norm. Globally, the green building market is doubling every three years, as revealed in “The World Green Building Trends 2016 Smart Market Report” by Dodge Data and Analytics, New York. While mandates make sustainable building a bigger force abroad, its rapid adoption in the United States is even more remarkable given its voluntary and value-driven approach. Green is now mainstream, which is reflected in ever more stringent codes, communities and states that institutionalize green practices, and owners and the real estate market are endorsing its value.

Dodge and United Technologies Corp. (UTC), Farmington, Conn., produced the third Smart Market report analyzing green building trends (2009, 2014 and 2016). Other contributors include Saint-Gobain, a French high-performance building materials company, the U.S. Green Building Council (USGBC), and Regen Network, a consortium of green building manufacturers and service providers, based in Berkeley, Calif.

The report found U.S. green building now represents 45 percent of all commercial building activity (verified green-build construction). In addition, the report projects a 14 percent cost savings over five years in building operation and a 7 percent increase in value when meeting green standards. By 2018, the highest level of growth (39 percent) will come from firms where 60 percent of their projects are green. The green building market also favors retrofits.

John Mandyck, chief sustainability officer for UTC, has witnessed the rapid success of the U.S. green building movement, though its cause wasn’t definitive. He now has some answers. It’s something he calls the “value trifecta.”

“The first value is the buy-in from investors,” he said. “In the last five years, $7 trillion in institutional value assets have gone into green building development. Private equities have indicated they will only invest in certified green building going forward. These buildings hold their value.”

Building owners are another value.

“While [owners’] ability to save energy and water with green building is still of great importance, the economic value now also lies in the lease,” he said. “In looking at 30,000 buildings, Dr. Nils Kok with the Maastricht University found that green-built office buildings could command 3 percent higher rent, enjoy 7 percent higher cash flow, higher occupancies and had a 13 percent greater transaction price when sold.”

Tenants are the third value, and they have fed the healthy building movement, something the USGBC, the Living Building Challenge and the International WELL Building Institute have responded to within the green-building-certification world.

“Green building payback is typically energy and water reductions,” Mandyck said. “But for an owner, operational costs are estimated at 9 percent for mortgage and rent, 10 percent roughly energy and maintenance. The remainder costs are salary and benefits of the people in the building. Keeping employees healthy and happy to optimize their performance is getting a much closer look.”

Hearst Tower in New York City was recertified in 2016, moving from LEED 2009 Gold to Platinum.

UTC worked with Harvard University to investigate how green buildings might improve occupant productivity. In October 2015, “The Impact of Green Buildings on Cognitive Function” lab study found participants’ cognitive function test scores doubled (101 percent) in indoor environments with improved indoor environmental quality. The following year, an off-site study compared occupants in high-performance buildings against those in certified green high-performance buildings. Those in the green-certified buildings saw an additional 26 percent higher cognitive function scores. They also slept better and reported fewer adverse health symptoms. More studies on healthy building impacts are underway in the United States and globally as owners and the building community take note.

Resiliency is also expanding the scope of green building.

“A discussion of building resiliency is especially seen in metro centers that have suffered extreme weather and natural disasters,” Mandyck said. “For instance, Hurricane Sandy triggered a resiliency effort resulting in more stringent and greener code. High-performing green buildings are also being looked to as energy islands because of their strong energy efficiency, water efficiency and use of ­alternative-energy strategies including storage and microgrid efforts.”

The 2016 Smart Market report also found green building in the institutional sector (universities, hospitals, and government buildings) outpacing office construction and other segments.

“Big institutions have sustainability goals and metrics,” Mandyck said. “So if they are building, they will be building green versus the general market.”

From a certification perspective

As of April 2017, 2.2 million square feet of commercial space become Leadership in Energy and Environmental Design (LEED) certified on a daily basis. The Green Business Certification Inc. provides the third-party credentialing and verification. While green building has come a long way in 20 years against the sheer volume of building stock, there are still many more challenges ahead, said Brendan Owens, USGBC chief of engineering.

“New and innovative financing mechanisms, city engagement with building codes and incentives have accelerated green building uptake,” Owens said. “These represent a fundamental shift to green build today, as has solid-state lighting, efficient HVAC and better building envelopes; tools to help integrate design; and better building-design assessments including occupant health. There’s not a single place where we haven’t seen the building and materials industry step up.”

Aspiration has always played an important role in certification programs, which set levels of certification based on achievement.

“From a trend perspective, between 2001 and 2003, most projects coming in were at the LEED-certified level, then silver, then gold and platinum,” Owens said. “Today it’s flipped. Now we have lots of buildings earning platinum, lots of gold, some silver and fewer simply certified. It’s [LEED] doing what the market is good at—getting better, more efficient.”

LEED set the model that others have replicated in one form or another. What’s interesting is how the programs are aligning, allowing owners to pursue complementary multiple certifications that offer different emphases.

“USGBC is interested in crosswalks between other programs that take a deeper dive in areas that LEED may touch on,” Owens said. “LEED and the WELL Building Standard is one good interaction. We have crosswalks for other programs including Living Building Challenge, SITE [certified landscapes] and PARK SMART [high-performing, sustainable garages]. These allow us to identify program synergies and help building teams.”

Energy efficiency remains vital

For the last 10 years, Johnson Controls has put out its Energy Efficiency Indicator. The latest from 2016 interviewed 1,243 energy and facility management executives who shared current and planned investments in energy efficiency, key drivers and barriers to improvement. In the United States, nearly two-thirds (67 percent) of organizations have a carbon-reduction goal, an improvement from 41 percent in 2013 and 11 percent in 2007. Interestingly, even at fourth (52 percent), U.S. respondents stated their organizations plan to have resilient buildings capable of running off-grid in the next 10 years. India led (87 percent) followed by Brazil (76 percent), China (65 percent), and Germany (50 percent).

The United States fell in the middle ranking when it came to energy-efficiency barriers, such as a lack of awareness of opportunities, shortage of technical expertise, savings and performance uncertainty, and an insufficient return on investment. However, it led in indicating the absence of funding for energy improvements within their firms. Nonetheless, all respondents showed almost a doubling from 2013 in finding their organizations recognizing the benefits of energy efficiency. That represented an energy-efficiency investment ranking of 68 percent.

“We also discovered two trends,” said Clay Nesler, vice president, Global Energy and Sustainability, Johnson Controls. “We have been tracking for years whether organizations that lease their space would be willing to pay a premium for green buildings. The answer was typically ‘no.’ Our recent report found 46 percent would now pay a premium, more than three times the result in 2013. The other trend found 37 percent of ‘lessors’ will build out their space creating green offices within green certified core and shell buildings. That doubled in 2016 from 2013. There are very few Class A or Class A+ that aren’t represented by LEED or Energy Star certifications.”

Within the survey, 46 percent indicated they made building control improvements (HVAC was the highest at 63 percent).

“The larger the facility, the more likely they were to install a building management system,” Nesler said. “Buildings less than 100,000 square feet were a third less likely to install such systems. But I do see a lot of opportunity for smaller buildings with mechanicals sized for smaller buildings offering plug-and-play capability, something we’ve pursued.”

The latest indicator also revealed growth in organizations who plan to have, or already have, at least one certified green building. That result rose from 51 percent in 2010 to 78 percent in 2016.

The cost of going green

The answer to whether green building technologies and strategies are more expensive is becoming clearer. They are, but return on investment also is very aggressive based on building performance savings.

Owens said the building should be cheaper to operate if owners include a good building orientation, solar shelfing, thermal mass, and tight building envelope, which all reduce HVAC load. Efficient and controlled artificial lighting and daylighting also are important factors.

Verasys is Johnston Controls' plug-and-play control system for smaller buildings that address lower energy use.

A milestone study by Davis Langdon and AECOM, two global cost and project management consultancy firms, was even more declarative. It states, “There are expensive green buildings, and there are expensive conventional buildings. Certification as a green building was not a significant indicator of construction cost.”

“When owners see they can get a payback for their green investment, they commit,” Mandyck said. “Payback in both energy and employee productivity really accelerates green investment. An owner could see a payback in three months.”

One final point is the value of recertification.

“Ongoing certification is important,” Nesler said. “Very few organizations recertify and they should. New technologies can also refresh green performance.”

About The Author

GAVIN, Gavo Communications, is a LEED Green Associate providing marketing services for the energy, construction and urban planning industries. He can be reached at [email protected].





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