gb08-communicatingvalueofgreen

8/3/2019 gb08-communicatingvalueofgreen

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Communicating the Valueof Green Buildings


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PresentersSteve Kokes

Coates Kokes

Portland, OR

[email protected]

Peter Andrews

Melvin Mark Brokerage Co.

Portland, OR

[email protected]

Andrew MacKinnonColliers International

Victoria, BC

[email protected]


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Its a Brave New World


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Trends

Number of green consumer packaged goodsdoubled between 2005 and 2007

- 5933 released in 2007 alone

36% of consumers almost always buy green

- polled in January 2008- vs. 12% in August of 2006

Source: Mintel, a Chicago-based consumer research company


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55% of US consumers consider the

environment the most important

issue facing the country.

Source: BuzzBack Research, New York, May 2008

Trends


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In the United States alone, buildings account for:

70% of electricity consumption,

39% of energy use,

39% of all carbon dioxide (CO2) emissions,

40% of raw materials use,

30% of waste output (136 million tons annually), and

12% of potable water consumption.

Its the building stupid

Stats from USGBC website


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Heightened public awareness around globalwarming makes energy the Big Kahuna issueof sustainability.

Its the low hanging fruit.

Its easily measurable.

Energy is Now More Important


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Most CFOs believe sustainability can leadto cost savings, increased revenues, greater

customer retention and a competitive advantage,

so clearly this is an opportunity that can

not be ignored. The question each of us shouldask is whether we are taking an aggressive

enough position, given the rapidly approaching

tipping point of this issue.

Lauralee MartinGlobal Chief Operating and Financial OfficerJones Lang LaSalle


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Communicating the Value of Greento Prospective Tenants


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Green Building as a Mega-Trend

2007 green building construction starts

exceed $12 billion

90 million square feet in 1000+ projects

LEED certified

Another 8,000 projects registered


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Green Building as a Mega-Trend

Citigroup

committed $50 billion to environmental projects

Goldman Sachs

committed $1 billion to alternative energy in2005 and exceeded this by 50% by 2007

Hines

creates first green fund of $120 M in equity

Co-Star study

4.1% higher occupancy

$11.33 per square foot


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Here in Portland

More than 1 million sq. ft. of LEEDcertified product coming on line over

next 2 years


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Park Avenue West Tower


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MachineWorks


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One Waterfront Place


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Is Green Building Becoming a Priority?

If so, how do we market, differentiate

and properly describe these properties

to prospective tenants?


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A Changing Product

Reduces occupancy cost

Lowers absenteeism

Increases productivity

Fosters a healthier work environment


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What is LEED?

A process that:

Uses integrated designand other best practices.

To produce product that will

- be more efficient

- decrease maintenance

- use fewer resources- increase productivity


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A hierarchical system:

Certified

Silver

Gold

Platinum

But even at the same level, no

two buildings will be exactly alike

What is LEED?


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Top Four Tenant Issues

Location

Rate

Tenant Improvements

Timing


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The Value of Green Buildings

to Tenants

Fulfills a philosophical commitment

Increased productivity: better lighting quality

improved thermal control

improved air quality

a new value system


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What Are the Costs of Doing Business?

For most businesses 90-95% of their costs

are human

salaries

benefits

training

healthcare


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People

10 employees @ $100,000/year (average FTE cost)

HR total cost $1,000,000 (95% of total cost)

Standard Existing Building

2,500 sf @ $20/sf (average existing buildings)

$50,000 (5% of total cost)

High Performance Building 2,500 sf @ $32/sf (average existing buildings)

$80,000 (8% of total cost)

Total: $1,050,000 (100%)

Productivity per SF $1,000,000 x .03 = $30,000/year gain divided by 2,500 =

$12/sf per year

Increase in Revenue

$2 M x 1.03 = $60 K increase


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Simple Questions Show the Way

Average annual employee cost?

Average annual absenteeism rate?

Average annual turnover rate?

Estimated turnover costs to replace an employee?

Average occupied square footage per employee? Average annual health-related complaints due toconditions related to the workplace and estimatedannual cost of dealing with these issues?


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What Can Brokers Do

to Become More Educated

Read

Sustainable Industries Journal Urban Land Institute

USGBC website

Attend seminars Find specialists in architecture/

engineering/construction, etc.


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The Value of Green for Owners


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Definition of Value Value: the rate at which you produce

a result

Its about work and productivity,

not efficiency


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How a Building Gets

Green Work Done

View a building or buildings as a system

InputsProcessOutputs

Increasing productivity throughoutthe system


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The 3 Rs

2007 Sandia Corporation


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The Ways of Measuring Value Monetarily:

NOI, IRR, costs, revenue

occupancy rate, rental rate

Environmentally:

quality of life or survival?


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Environmental Value

Addressing the Commons shared

resources of carbon, energy, air and water

Beyond code compliance

Obligations versus warranties


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Addressing the Commons

Market Mechanisms:

Infrastructure incentives

Carbon markets

Transferable development rights


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Infrastructure

sewer

waterelectrical

roads


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http://go.worldbank.org/DM8TFS9FP0

Carbon Markets


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Transferable Development Rights

Staff Contact:Darren Greve

TDR Program Manager206-263-0435206-296-0192 Fax206-296-0200 [email protected]


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Beyond Compliance

Green building codeperformance path

Zoning and density approval process

Triple bottom linepeople,

prosperity, place


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Green Building Code

Achievement of an EnerGuide Rating Systemrating of 77 is an acceptable solution thatprovides an alternative to compliance withthe insulation table for residential buildings.

Changes to the BC Building Code, Effective September 5, 2008


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Zoning and Density Approvals

Development Cost Charges (DCC)

To exempt DCCs for small-unit housing unitsfor:

- for-profit affordable rental housing;

- a subdivision of small lots designed to resultin low greenhouse gas emissions;

- development that is designed to resultin low environmental impact.

Bill 27 BC Legislature


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Triple Bottom Line

Copyright 2008 Palgrave Macmillan Ltd.


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Obligations vs Warranties

Green leases

District energy

Positive action rather than avoidance

of negative action


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Green Leases

Standard operating procedures

- energy conservation

Definition of rights, duties and

Privileges between landlord and tenant

- indoor air quality- waste

- carbon


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District Energy

District Energy St. Paul


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Positive Action

Traditional Neighborhood Design:

Compact

Walkable

Mixed use

Habitat uses on-site

Bio-filtration beds/retention ponds


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The New Value Chain

Future proofing

Life cycle analysis

Proactive restoration

Cradle to cradlesystems approach


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Communication Tips

Make green more than trendy

beyond branding benefit

Highlight value versus current

market appeal

Target appropriately to the value chain

of your client


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Communicating the Value of Green


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Legacy


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Community Relations and Image


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Eco + Luxury

The Casey


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Appeal to theFinancial Motivations


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Describe the LessTangible Benefits


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Utilize the Language of the Industry


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Metaphors, Analogiesand Equivalents


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Stories and Backstories


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A for-profit developerputting together a

LEED Platinum buildingis really unusual.

And at the end of the day,

it didnt really cost usany more to build and the

energy savings

significantly increases the value of the building.

Gary ChristensenChristensen Development Corp.


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Encourage Them to Talk to Others


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Provide Specifics/Support


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Building orientation, design elements

and material choices increase energyefficiency by more than 30%over conventional buildings


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Dont be Afraid to Talk About

Your Philosophy


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Conveying What Youve Done is Good but

do it in a Humble and Understated Way


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Awards Lend Credibility


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Pursuing Earned Media

in Addition to Paid


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Would you like some fries with that?


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The more sustainability is aligned

with the overall positioning ofyour company the more effectivethe appeal will be.


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Integration is Key


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Promise an immediate and higher margin than

will be delivered

Get long-winded

Imply that the audience is doing it all wrong

but if they infer that on their own, thats OK.

Donts


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Avoid Greenwashing


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Greenwashing

Skepticism is at an all time high

Greenwashing Index (greenwashingindex.com)

Specifically avoid messaging that:- misleads- overstates

- is vague- leaves out significantcontradictory information


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You Can TellWhen People Get it


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And When They Dont.


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Consider the Downside

Lower tenant satisfaction

Declining reputation Early obsolescence


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Resourceswww.sustainablelifemedia.com

Green Marketing by Jacquelyn A. Ottman

www.betterbricks.com

www.coateskokes.com


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Thank You!


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Q + A


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gb08-communicatingvalueofgreen

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