Green Building & Risk Management
The insurance industry plays an integral role in the real estate industry, providing coverage for the symphony of products and services that go into the creation of a building, while also insuring the finished building product. USGBC recognizes the unique role the insurance industry plays in helping to support and promote green building practices and has been engaging in a dialogue with industry leaders with the hope of sharing information and focusing efforts.
Underwriting insurance coverage is the art of understanding, assessing, and mitigating risk. Green building has presented challenges to insurance carriers stemming from the fact that green building design and construction is new. New things are tougher to understand from a historical loss perspective, requiring leading insurance carriers to take a proactive approach to understanding the possible ramifications of providing expanded coverage to meet the needs of firms engaged in the green building industry, while anticipating the market demand for these specialty insurance products.
Insurance carriers recognize the staying power and benefits of sustainable design and are finding ways to provide coverage to their clients, especially given the belief that green buildings may exhibit less exposure to loss over the long term given the commissioning requirements and integrative design approach used by project teams. As of January 2009, there were at least eight companies that offer specialty green insurance policies or endorsements.
Risk and Insurance recently released “Building Green Makes Sense in Any Economy” citing the continued benefits of building green in a tough economy, while delving into some of the coverage issues associated with insuring this market. Ann Butterworth, director of property underwriting at Liberty Mutual Property was quoted as saying her company believes “that commercial property owners who develop a practice of a systematic and collaborative design process throughout the green building project might ease some of the property, contractors’ and general liability coverage issues.” USGBC shares this view.
And while nothing can substitute for project experience and loss history, contractors, professional consulting firms, facilities managers, and owners/developers of green buildings can help reduce their firms’ risk profile by implementing industry best practices to manage their business risk in a prudent manner. The commercial real estate team at USGBC invites industry professionals to share your risk management practices with us at [email protected] so that we can gain a better understanding of how firms in the trenches are managing risk and develop tools to assist as appropriate.
LEED registrations of lodging properties have increased significantly in recent years: 2007 saw almost four times as many hotels register for LEED as 2006, and 2008 brought us nearly as many new lodging property registrations as in the previous eight years combined. If the trend continues there are likely to be 900 hotels in the LEED certification pipeline by the end of 2009.
The hospitality industry’s early involvement with LEED was centered almost exclusively on new hotels. But 2007 saw an uptick in the number of hotels registering for LEED for Existing Buildings, representing a broadening of the focus on green design and construction to include sustainable operations, maintenance and management of lodging properties. Currently, there are almost 100 hotels registered to pursue LEED for Existing Buildings certification. This is extremely promising and presents an enormous opportunity to reduce the environmental impact of the lodging industry given the nearly 5 million guest rooms and more than 5 billion square feet of existing hotel space in the United States alone.
Hospitality companies of all sizes made significant strides in 2008 and continue to prioritize sustainability initiatives despite the current economic downturn. Nine of the 10 largest hospitality companies have active LEED registered projects, and Starwood Hotels & Resorts became the first hospitality company to pursue volume certification of LEED with its public commitment to certify all hotels in its new Element brand. The Ambrose (Santa Monica, Calif.) and Avalon Hotel & Spa (Portland, Ore.), both boutique hotels, pioneered sustainable hotel management as the first two hotels to achieve LEED for Existing Building certification, while the boutique Proximity Hotel (Greensboro, N.C.) became the first lodging property to achieve Platinum LEED certification.
The engagement of these and many other leading hospitality firms with sustainability efforts as well as the industry’s expanding commitment to green existing hotel stock warrant optimism and excitement with respect to the future prospects of LEED and the general environmental leadership by the global lodging industry.
Dealing in Green: LEED for Brokers – Webinar Series
This three-part webinar series will feature members of the brokerage and tenant community sharing lessons learned from their experiences in leasing LEED-certified space – and making the business case for LEED in the real estate world. Join experts in the field to discuss the differences among the various LEED certification systems, and how they apply to fulfilling tenant needs and successfully negotiating leases.
Who should participate: landlord representatives, tenant representatives and anyone else interested in understanding more about the nuances of LEED-certified space and how to structure green space transactions.
Session 1: LEED 101: Certification & Market Overview for Brokers (March 25, 2009, Available On-Demand)
Session 2: Meeting Tenant Demands with LEED-Certified Space (April 8, 2009, 1-2:30 p.m. ET)
Session 3: Case Study: Challenges and Opportunities in Green Transactions (April 23, 2009, 1-2:30 p.m. ET)
Register for these webinars here »
LEED for Retail – Webinar Series
Interested in obtaining best practices, business reasoning and tools currently being utilized to increase sustainable design and building practices in retail real estate? Join us as experts across the industry detail the pilot LEED for Retail rating systems and share best practices for achieving success in using both LEED for Retail and volume certification.
Who should participate: retailers, consultants, architects, retail developers and anyone else interested in executing or promoting green retail design and construction.
Session 1: An Introduction to LEED for Retail 2009 (Feb. 19, 2009, Available On-Demand)
Session 2: LEED for Retail in Action: C ase Studies from Early Adopters (March 5, 2009, Available On-Demand)
Session 3: Volume Certification for Retailers (March 19, 2009, Available On-Demand)
Access the archived webinars here »