Greenbuild 2010: Ready to Redefine the Future
The U.S. Green Building Council's Greenbuild International Conference & Expo convenes the industry's largest gathering of representatives from all sectors of the green building movement. Three days of extensive educational programming, workshops, a vast exhibition floor and ample networking events provide unrivaled opportunities to learn about the latest technological innovations, explore new products, and exchange ideas with other professionals.
Greenbuild 2010's educational and workshop programming, which includes a Residential Summit, International Forum and USGBC LEED workshops, embodies its central theme of Generation Green—a moment in time that will redefine the future for cities and towns around the world. Greenbuild 2010 will also feature exciting speakers, including current U.S. Secretary for Housing and Urban Development Shaun Donovan, environmentalist, entrepreneur and journalist Paul Hawken and former HUD Secretary Henry Cisneros. USGBC will soon announce Greenbuild 2010's keynote speaker. Stay tuned to www.greenbuildexpo.org, subscribe to USGBC Update, and follow @USGBC on Twitter to get all the Greenbuild news, including speaker announcements.
Greenbuild is the three-time recipient of IMEX Green Meetings Award and has been named among Tradeshow Week's Top 200 shows, received TreeHugger.com's Readers' Choice Award for Best Green Event and earned Meeting Professionals International's RISE Award for Organizational Achievement. The 2010 show will be held Nov. 17-19, 2010, in Chicago, Ill. This past year's conference in Phoenix, Ariz., drew more than 27,000 attendees and featured more than 1,800 exhibit booths, and Greenbuild 2010 is expected to be even bigger. Visit www.greenbuildexpo.org for more information.
The Green Operations Guide
Second in the series of LEED Integration Guides, the "Green Operations Guide: Integrating LEED into Commercial Property Management" was developed to assist multi-tenant office owners and managers, as well as their service providers, in reducing the environmental impact associated with commercial real estate operations by articulating the business case for sustainable asset management and providing practical guidance on ways to reduce and measure energy, waste, water, etc. This guide also includes sample policies, practices and examples, as well as an online repository of usable worksheets and checklists for LEED for Existing Buildings: Operations & Maintenance certification submittals within LEED Online.
The Green Operations Guide will be available for sale early November. Please visit the USGBC Store to purchase.
For more information about the Green Operations Guide, watch the free webcast here.
Practical Strategies for Hotels
The third installment of the USGBC's "Practical Strategies" guides has been released. This resource highlights LEED-certified hotels, focusing on one or two of the most innovative environmental strategies each property has implemented. As with the other Practical Strategies guides, it is meant to act as a showcase of examples that hotel and lodging professionals can use when pursuing LEED certification for their projects.
"Practical Strategies for Hotels" can be downloaded for free from the USGBC Commercial Real Estate page, or accessed directly here.
From the Desk of Nils Kok, On the Economics of Green Buildings
Buildings and their associated construction activities account for almost a third of world greenhouse gas emissions. The construction and operation of buildings accounts for about 40 percent of worldwide consumption of raw materials and energy. For this reason, important analyses of climate mitigation policies have identified the built environment as an important target for greenhouse gas abatement and have noted that small improvements could have large effects on their current and future energy consumption. Energy also costs money – about 30 percent of operating expenses in the typical office building in the United States. On average, this cost is the single largest and most manageable expense in the provision of office space. Thus, building and managing better buildings is a critical part of both environmental and economic well-being.
Two recent papers by my colleagues and me provide the first systematic analysis on the economic effects of some recent trends in green buildings. We concentrate on commercial property, and we investigate the relationship between investments in energy efficiency, effective rents (that is, rents adjusted for building occupancy levels), and selling prices. We analyze a large sample of office buildings, some of which have been certified for energy efficiency by the U.S. Environmental Protection Agency's ENERGYSTAR program or for holistic sustainability by LEED.
The results, which rigorously control for quality differences among buildings, clearly indicate the value of certifications in the market for commercial buildings. The results suggest that an otherwise identical commercial building with an ENERGYSTAR or LEED certification will rent for about 3 percent more per square foot; the difference in effective rent is estimated to be about 6 percent. The increment to the selling price may be as much as 13 percent.
Most importantly, our analysis supports a detailed investigation of the sources of the economic premiums embedded in the individual rents and asset prices of several thousand green buildings. This investigation relies upon internal documents made available by the EPA and USGBC. For buildings rated by the ENERGYSTAR program, we obtained the data on energy efficiency (i.e., kBTU usage per square foot) as measured and reported in the certification process. For the buildings certified by the LEED program, we obtained the raw data on sustainability as evaluated in the certification process. Within the population of certified green buildings, we find that variations in rents and asset values are systematically related to the energy efficiency of the buildings, and also to other indicia of sustainability, which are measured in the certification process. We also find that, within the population of certified buildings, variations in energy efficiency are fully capitalized into rents and asset values.
Last, we investigate the price dynamics of energy-efficient and sustainable commercial buildings during the recent period of turmoil and of unprecedented decline in U.S. property markets. We gather and analyze a panel of certified green buildings and nearby control buildings observed in 2007 and again in 2009. The results show that large increases in the supply of green buildings during 2007-2009, and the recent downturns in property markets, have not significantly affected the rents of green buildings relative to those of comparable high quality property investments; the economic premium has decreased slightly, but rents and occupancy rates are still higher than those of comparable properties.
Our findings have implications for investors and developers of commercial office buildings. Green building now accounts for a considerable fraction of the market for office space, and in some U.S. metropolitan areas certified office space extends to more than a quarter of all commercial space. Measured attributes of sustainability and energy efficiency are incorporated in property rents and asset prices, and this seems to persist through periods of volatility in the property market. These developments will affect the existing stock of non-certified office buildings. The findings already suggest that property investors attribute a lower risk premium for more energy-efficient and sustainable commercial space. Rated buildings may provide a hedge against shifting preferences of both tenants and the capital market with respect to environmental issues. Increasing market awareness of climate change, and rising energy costs can only increase the salience of this issue for the private profitability of investment in real capital.
Our findings may also have broader implications for current considerations of energy conservation policies and of measures to reduce global warming and climate change. It appears that modest programs by government and by nonprofit organizations to provide information to participants in the property market (i.e., "nudges") do have a large payoff. Buildings certified by independent entities as more energy efficient or sustainable command economic premiums in the marketplace. Energy savings in more efficient buildings are capitalized into asset values, and this is not affected by the recent volatility in the U.S. property market. These results suggest that more aggressive policies – in the U.S. and elsewhere – of certifying, rating, and publicizing buildings along these dimensions (including, perhaps, those buildings that score low on measures of energy efficiency) can have a large payoff in affecting energy use and maybe the course of global warming.
Eichholtz, P., Kok, N. and J.M. Quigley. "Doing Well by Doing Good: Green Office Buildings." American Economic Review, forthcoming, 2010.
Eichholtz, P., Kok, N. and J.M. Quigley. "The Economics of Green Building." Working Paper, UC Berkeley, September 2010.
Dr. Nils Kok
Visiting Scholar, UC Berkeley
Assistant Professor, Maastricht University