From Montag
On May 3, 2011, Jennifer Senick was a keynote at our Fifth Annual Real Estate Conference where she addressed the financial and operational benefits of sustainable or green construction in the built and new project environments. Here, Meryl Gonchar, Co-Chair of GRSDs Real Estate Department, and Senwan Akhtar, an attorney in the Real Estate and Corporate Departments and LEED-AP, interview Ms. Senick on the major points of her presentation and work.
1. What are the major financial benefits for building green for new construction in the residential, commercial, and industrial sectors?Key financial benefits of new green construction generally relate to lower operational costs, and may include lower energy, waste and water costs, lower maintenance costs, and increased productivity and health. The latter, while difficult to measure/prove, have come to be regarded as the holy grail of green building given that labor costs for most businesses comprise the overwhelming majority of costs. Building green also presents opportunities for incentives to offset any higher initial capital costs and may result in increased occupancy rates and rental rates, insurance discounts and higher property value. While the data remains thin on these potential benefits, they have generated much interest among real estate companies. New green building valuation tools and metrics — such as the Green Building Underwriting Standards — should help to standardize this financial data, providing better opportunity for analysis and attainment of these benefits. The Green Building Underwriting Standards were completed by the Capital Markets Partnership, an American Standards Institute Accredited and Audited Standards Developer.1According to the Construction Marketplace SmartMarket Report, commercial green buildings have demonstrated an 8-9% decrease in operating cost, a 7.5% increase in building value and a 6.6% return on investment improvement.2 According to the Greening of Corporate America SmartMarket Report, commercial green buildings experience a 3.5% occupancy ratio increase and a 3% rent ratio increase.3 In a comparison of ENERGY STAR buildings and market comparables in the first quarter of 2008, ENERGY STAR buildings achieved 3.6% higher occupancy rates.4ENERGY STAR qualified homes use substantially less energy for heating, cooling, and water heating, delivering $200 to $400 in annual savings.5 There are currently over 1 million ENERGY STAR qualified homes in the United States and in 2010, families living in these homes saved more than $270 million on their utility bills.6In addition to offering financial advantages, building green provides environmental and social benefits such as protecting biodiversity and ecosystems, improving air and water quality, reducing waste, conserving natural resources and enhancing occupant comfort and health.
via The Financial Benefits Of Green Building – Real Estate & Construction – United States.