COVER STORY, MARCH 2008

USGBC - “LEED-ing” THE WAY
The U.S. Green Building Council is paving the road for real estate’s environmental movement.
Coleman Wood

The green movement, as of late, has made waves throughout many facets of American life, and the commercial real estate industry is no different. Tenants are using words such as sustainability and efficiency when describing the properties they are looking for, and developers are touting the green features of their projects just as much as other amenities. So what does it take for a building to be called environmentally sustainable? This month, Heartland Real Estate Business takes a look at the LEED certification program that is at the cornerstone of the green building trend.

The Leadership in Energy and Environmental Design (LEED) rating system was developed by the U.S. Green Building Council (USGBC) in 2000. The system is designed to certify the environmental sustainability of a building.

“LEED is really considered a benchmark and a measuring stick for the environmental performance of a building,” says Marc Heisterkamp, manager of market development for the corporate/investment real estate sector at the U.S. Green Building Council. “So, companies and project teams looking to validate the environmental performance of their buildings, or even to give it a framework for what activity they can do to improve their performance, look to the LEED rating system.”

Buildings receive credits in five different areas that go toward the certification of a building:

• The first area is sustainable site, which looks at how the building promotes alternative transportation. Points are awarded based on things such as how close the building is to public transportation, preferred parking for carpools and hybrid/fuel efficient vehicles, and how the building incentivizes these alternative forms of transportation.

• Water efficiency looks at the types of fixtures a building uses, and how water efficient they are, as well as the building’s landscaping practices. The use of plants native to the area is encouraged, since they require less irrigation.

• The materials and resources area focuses on the construction of the building. Points are awarded for good construction waste management practices, as well as the amount of recycled materials used in construction. With materials such as wood, the USGBC encourages using rapidly renewable resources and materials that were grown and harvested with sustainable practices.

• Energy and atmosphere is a broader category that looks at the overall energy performance of the building. Points are awarded for efficiency, but the most points are given to buildings that get some or all of their energy from green power, either on-site or purchased.

• Finally, indoor environmental quality is designed to look at the overall comfort level of the building’s occupants. A requirement is that the building take steps to contain environmental tobacco smoke. Points are also awarded if any building materials that emit gases, such as carpeting and paint, are low-emitting brands. The USGBC also looks at the amount of natural light available inside the building, as well as how the building is thermally controlled. All criteria in this area look at how the building affects the health of its occupants.

There are four levels of LEED certification that buildings can receive: Certified, which receives 40 percent of the points possible; Silver, which receives 50 percent; Gold, which receives 60 percent; and Platinum, which receives 80 percent or more of the possible points.

Each of the five areas has numerous other criteria for which buildings can be awarded points, including a sixth area, innovation and design, that gives additional points to buildings that take creative approaches to sustainability that are not in LEED’s current rating system. But no two projects take the same path to certification.

“There’s no equation that this plus this equals a silver building or a gold building,” Heisterkamp says. “It’s just a compilation of those things, the sheer number of them, and their impact, that moves them up the ranks.”

This allows the rating system some flexibility to work with projects on a case-by-case basis. Some credit areas, such as points awarded for brownfield redevelopment, may not apply to some projects. But there are some pre-requisites in each of the five areas that any building applying for certification must do to be considered, such as the storage and collection of recyclable materials and the prevention of construction pollution during the build process.

While the news of the past year would have many people believing that a large number of new construction projects are going green, the numbers are still low. According to the USGBC, only 6 to 7 percent of new construction starts are seeking green building certification.

“I think that, despite the recognition and market uptake of the rating system, we still have a long way to go for the broader market to understand it and adopt it for their buildings,” Heisterkamp says.

And though the numbers show that more green building activity is occurring on the coasts, one Midwestern city has brought itself to the forefront of the green building movement.

“Chicago is certainly a hotbed of green building, and [it] has been heavily promoted there, both by the city government, as well as a number of companies that are actively using it,” Heisterkamp says.

Led by Mayor Richard Daley, the city of Chicago now requires that all municipal projects, including those that receive city financing, to obtain at least LEED-Silver certification.

“It’s only for buildings in a very small sector of commercial real estate that receive city financing, but the city wanted to lead by example, and that’s why they toughened the standards a couple of years ago,” says Doug Widener, the executive director of the USGBC’s Chicago chapter. “The city would like to see the private sector move towards LEED and efficient building construction and operations, and their thought is, ‘what better way to do it than walking the walk ourselves?’”

The rest of the city has caught on to the idea. To date, Chicago has approximately 75 LEED-certified projects,  with another 300 in the pipeline. These projects are spread throughout all sectors of commercial real estate.

“If you add up registered and certified projects — and look at municipal boundaries — Chicago, as of late 2007, had more registered and certified LEED projects than any other city in the country,” Widener says. While some of these projects could take a few years to come online, Chicago has clearly taken the initiative when it comes to green building design.

But what will it take for environmentally sustainable buildings to catch on in other parts of the country? To Widener, the benefits are obvious.

“As people start to recognize the return on investment of green buildings — energy savings, resource savings, increased productivity of people that work in green buildings — I think they’re going to see that it makes smart financial sense, as well as good environmental sense,” he says.

While the greening of new buildings picks up, Heisterkamp also sees a push in the future toward retrofitting buildings for LEED certification.

“If you look at the market right now, if you want to buy or lease space in a green building, chances are the green building will have been built in the past couple of years,” Heisterkamp says. “As we go through 2008, you’ll see more and more of the existing stock registering under the LEED rating system.”

With man-made construction taking up a larger and larger share of Earth’s landmass, it is becoming increasingly important for buildings to leave as small a footprint as possible on the environment. Steps such as the LEED certification program are just the beginning of what is needed to preserve the environment for future generations. 

“We have a short timeline to influence more sustainable and more efficient buildings, given the impacts of global warming,” Widener says. “And the nice thing is it seems like both the public and private sector are rallying behind that, and also understanding that there are significant financial benefits to going green.”

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