The Benefits of Green Building

Green buildings have realized substantial bottom line savings from more energy efficient heating and cooling systems, ventilation, waste reduction and environmental sustainability. While initial investment is required to incorporate environmentally friendly technologies and design into buildings, the savings far outweigh the costs.  In fact, the California Sustainable Building Task Force shows that an initial increase in upfront costs of approximately 2% for green design will yield lifecycle savings of more than ten times the initial investment, or 20% of total construction costs (based on a conservative estimate of a 20-year building life.)

Even the startup costs of building green can be comparable or less expensive than average construction prices where resource efficient and smaller mechanical, electrical and structural systems are more effective than oversized, underutilized systems, according to the US Green Building Council (USGBC). Generally, McGraw-Hill Construction estimates that green buildings generate an increase of 7.5% in a building’s value and a 6.6% improvement in return on investment, while decreasing operating costs by 8-9%.

The payoffs go far beyond financial returns. A recent study published by the University of San Diego and CB Richard Ellis Group showed that employees in LEED certified buildings take 2.9 less sick days each year than in non-green offices, which saves their employers roughly $1,200 per worker and results in significant productivity gains that generate sales. The research doesn’t determine exactly which green technologies improve employee health and productivity, but it is clear that natural lighting and cleaner air increase office stamina and even retain staff.

Externally, green buildings are creating market differentiation opportunities, improving reputations with clients and minimizing risks to corporate brand equity. Even in recessionary times, green buildings have been commanding higher rents; $30 per square foot, $3 over the national average of $27, and vacancy rates are over a percentage point lower. Green buildings also welcome government tenants and increase public sector good will.

Demand for green buildings continues to climb, as the value of green building construction is expected to reach $60 billion in 2010, up from $12 billion in 2008. Green is being incorporated into building codes at local and state levels. By upgrading now, buildings can anticipate these mandates and upgrade on their own terms, avoiding delays or operational losses. As more and more buildings become LEED certified, traditional buildings risk obsolescence and forfeit any first mover benefits of going green. Simply put, green buildings create a triple net effect, benefitting the owners’ bottom line, its tenants, and the environment. This  author is left with just  one question: Why not build green?