New York Real Estate Journal

Vince Capogna: Message from the executive director of U.S. Green Building Council Long Island chapter

April 25, 2011 - Long Island
There's a significant body of scientific research showing that people are much more motivated by pain than by pleasure. By some accounts pain is more than double a motivating force. With gas climbing past $4 per gallon and oil well over $100 per barrel are you feeling motivated yet? Help me out here-I'm trying real hard to look for a silver lining. Our chapter members have been advocating for years that when you build green, everyone profits. We have tried to show the benefits from every angle-economic, health, sustainability, etc., and from all perspectives-owner, tenant, employer, employee, etc., etc. One of the more interesting business case studies was done a couple of years ago. The CoStar group together with the Center for Real Estate at the University of San Diego analyzed more than 1,300 LEED and Energy Star buildings representing about 351 million s/f in CoStar's commercial property database of roughly 44 billion s/f, and assessed those buildings against non-green properties with similar size, location, class, tenancy and year-built characteristics to generate the results. According to the CoStar study, rental rates in Energy Star buildings represent a $2.40 per s/f premium over comparable non-Energy Star buildings and have 3.6% higher occupancy. LEED buildings on the other hand, command rent premiums of $11.33 per s/f over their non-LEED peers and have 4.1% higher occupancy. In a trend that could signal greater attention from investors, Energy Star buildings are selling for an average of $61 per s/f more than their peers, while LEED buildings command a remarkable $171 more per s/f. Clearly, the benefits are significant and they extend beyond those associated with energy efficiency alone. So what's stopping us from seeing every building constructed or renovated as a LEED building? Is it cost? It shouldn't be. Davis Langdon's comprehensive "Cost of Green Revisited" study in 2007 found that "there is no significant difference in average costs for green buildings as compared to non-green buildings" and that was four years ago when products and technologies still carried a bit of a "green premium." When you also consider the incredible incentives available, especially on Long Island, it can be significantly more advantageous to build or renovate to LEED standards than to "conventional." With all the great reasons and multitude of benefits to be derived from green building one would think that every building would bear a LEED plaque. I guess I keep forgetting that copious scientific research says for taking action, we need a motivation strategy. Here's hoping that it isn't going to take the pain of $5 per gallon gas and $200 per barrel oil to motivate us to do what we should have been doing all along: When you build green, everyone profits. Vince Capogna, LEED AP ID+C, is the executive director of the Long Island chapter of the U.S. Green Building Council.