Sustainable Building - Build Your Gold Mine

When you hear the words, “go green,” eco-conscience,” sustainable building;” what thoughts go through your mind? I’ll tell you what I think – quality, better performance, less risk and economic savvy. In this first of five installments let’s look at the reasons why the decision to build green pays great dividends.

Most people associate quality with dollar signs, cha-ching! When building green, you have to expect the costs will be more in certain areas, like the initial design and architecture expenses. However, after the initial cost is said and done, you reap the economic benefits through decreased operating expenses throughout the life of your structure. As a matter of fact, a recent study presented at the Sustainable Real Estate Development conference, shows that a 30% reduction in energy consumption is the equivalent to a 5% increase in NOI (net operating income). Now that’s something to smile about! Additionally, with keywords like, quality, sustainability and green your property commands higher rent, better occupancy and lower lease-up down time. Not to mention that LEED (Leadership in Energy and Environmental Design) Class A commercial buildings attract higher rents - $39/sq ft as compared to $29/sq ft. Quality also attracts quality tenants; tenants that are likely to move in and stay there forever (and that’s music to our ears). When those prospective tenants tour your green building, remember these 3 remarkable case studies:

West Bend Mutual Insurance Headquarters

• 40% reduction in enery consumption
• Pre-estimated 16% productivity increase with 4 – 6% increase attributed to the employee’s work station environment control

Verifone

• 50% savings in energy costs
• Employee absenteeism dropped 40%
• AND productivity had a 5% increase which resulted in reducing payback time to under 1 year – 100% ROI (return on investment)!

California “big box” retail

• The study reviewed 108 stores, two-thirds had skylights and one-third did not.
• Results of this study showed that properties with skylights had an increase in sales by 40%.

As you can see the financial benefits of sustainable building puts money in the bank – and we’ve only skimmed the surface. Essentially, when you’re building, profit is the number one motivating factor. When you choose sustainable building you’re also making the decision to emphasize long-term value that will result in increased profits. In my next installment, I’ll discuss what makes a green building green. We’ll cover the basics and elaborate on some key elements of sustainable building.