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Jerry YudelsonYudelson Associates

February 2012

The Business Case for Green

Building

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Take-Aways

Green building is vital for controlling global CO2 production

Green building is here to stay• 45,000 LEED Registered Projects• 130 countries

Benefits are significant for all building types

Water saving next major green focus

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Green Building Important for Carbon Reduction

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Life-Cycle-Cost Positive Solution

Buildings are the only Life Cycle Cost-positive solution

25% of total carbon solution can come from buildings, including homes, stores, offices, hotels, institutional buildings and other structures

EMGP 270 Paris, HQE Certified

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Triple Bottom Line

Profit Financial return Marketing & PR Higher Productivity

Planet Less carbon, waste and

energy and water use

People Job satisfaction Healthy work environment

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Range of Proven Benefits

Absenteeism

Carbon Emissions

Energy Costs

Hospital Stays

WasteManagement Costs

Water UsagePerformance on School Tests

Retail SalesPer Square Foot

FactoryProductivity

Office Productivity

Occupancy Rates

Rental Rates

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Importance of Building Green

By the year 2040, 75% of U.S. buildings will be either new or renovated, vs. 2010 (23 billion m2)In Eastern Europe, focus is likely to be more on greening of interiors, whole building renovations and existing buildings.

40 Grosvenor, London

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Green Building Is Growing Rapidly

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U.S. Green Building Statistics

45,000 LEED registered projects (Jan. 2012)

10,000 LEED certified projects (Jan. 2012)

175,000+ LEED Accredited Professionals

Similar results for UK’s BREEAM; DGNB gaining acceptance

OREGON

HEALTH & SCIENCEUNIVERSITY

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Central/Eastern Europe LEED Activity

Country Cumulative LEED Project Registrations

(through January 2012)

Other Countries

Poland 56 Bulgaria: 7

Hungary 24 Ukraine: 4

Czech Republic 33

Austria 17

Croatia 9

Romania 10

Serbia 10

Slovenia 2

Slovakia 6

Estonia 1

Latvia 1

Total 180

Nokia Jucu Factory, Romania, LEED-NC Gold

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Green Buildings Make Money Sense

Genzyme Corp. Headquarters, Boston, Behnisch Architekten

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Business Case for Green

Financial/economic return

Risk management

Marketing/public relations

Productivity and health

Recruitment and retention

Policy directives

Investor interest is high

Sustainability concerns

TNT Express Headquarters Amsterdam

LEED-NC PlatinumZero Carbon Emissions

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Study Results

Energy Star Buildings vs. Peers

$26/m2 rent premium 3.6% higher occupancy Selling +$66/m2

LEED Certified Buildings vs. Peers

$122/m2 rent premium 4.1% higher occupancy Selling for +$1870/m2!

National Renewable Energy Laboratory, Denver

Zero Net Energy BuildingLEED Platinum

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Q42007 Q42008 Q4200920

22

24

26

28

30

32

34

36

38

31.36 31.43

28.99

3535.45

31.97

30.99 31.25

29.07

Gross RentsOffice, 5 stories plus, 200,000 to 1 Million, Multi-tenant

Source: CoStar

Energy StarLEEDOverall

LEED Rent Premium

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RICS Study Results

Based on 2008 Data: 893

certified U.S. buildings,

10,000 non-certified within

0.4-kmConclusions: Effective rent 6% higher Sales price 16% higher Green upgrade adds

$5.5 million (€4 million) to value

Marks & Spencer Plan A Marks & Spencer Plan A

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Relevance to Central/Eastern Europe

Green building worldwide

Uptake is rapid

Property sector similar in

many European countries

Global companies want

green spaces

Investors want green

buildings

Europark SalzburgGreen Retail Space

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Great Projects – Begin With Great Goals

Hagaporten 3, Stockholm

CSOB Bank, Prague

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Great Projects – Begin With Great Goals

Lintulahti, Helsinki

Solon Corporate HQ, Berlin

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Great Projects – Begin With Great Goals

Wunderlich Haus, Eberswalde, Germany

SAP Call Centre, Galway, Ireland

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Most costs are “people costs”

Studies show 3-7% gain in workplace productivity

A 1% gain in productivity pays all the energy bills

A 10% gain in productivity pays for the entire building (or the technology)!

Productivity Counts

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Marketing and Public Relations

BREEAM, LEED, DGNB

Ideal tools

Many European projects registered under US LEED

Save energy, water, waste disposal costs

Create green brand

Low-cost options available

RWE Essen, Ingenhoven Architekten

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Greening Existing Buildings: The Next Big Challenge

63 million m2 certified

Largest LEED system

International registrations up 22% in 2011

Also covers major renovations

Hines, 26,000 m2

Hines, Stuttgart, GermanyLEED Core and Shell Gold

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What Does This Mean in Eastern Europe?

Green certifications add value

Re-brand older spaces

Large global companies want green office space

Payback/ROI ~1-2 years

Prevent value erosion of existing holdings

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Water the Next Big Issue

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Preventing Urban Water Crises

• Urban water crises are likely to increase

• Good design & practice can reduce water use +50% in buildings

• Retrofits can reduce water use 35% to 75%

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Water Design Standards

• Control site irrigation & cooling tower water use

• Look at entire water cycle– Match quality with end use

• U.S. good practice– 600 L/m2/year

• Australian best practices:– 400 L/m2/a

• German averages:– 200 L/m2/a

Nuremburg, Germany

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Future of Green Buildings in CEE

Tenant demand + superiorenvironmental performance are major driving factors in making green buildings mainstream. However, stricter government regulation in the EU is likely to be the main reason for green buildings to become the de-facto standard for new + renovated buildings in 10 years.--Deutsche Bank Research, April 12, 2010.

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Take-Aways

Green building is vital for controlling global CO2 production

Green building is here to stay• 45,000 LEED Registered Projects• 130 countries

Benefits are significant for all building types

Water saving next major green focus

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The Future is Green, But…

If you want to score, run to where the ball is headed, not to where it is.

Ask yourself and your clients: how green will the built environment be in 2015 to 2020?

Non-performing green buildings will pay a penalty in that market!

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Jerry YudelsonYudelson AssociatesFebruary 2012

ОДЛИЧНО!