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www.awarenessintoaction.com
 Your Bottom Line
 You can afford to build green: The true cost is much lower than you think
Doug Gatlin / U.S. Green Building Council
white paper
E
vidence that green buildings do not have tocost a penny more than their conventionalcounterparts continue to pile up, as do the studiesthat validate signiicant ongoing operational costsavings or both new and existing green buildings.And these studies are extending beyond time andmaterial into such actors as building valuation, andhealth and productivity o building occupants.The most commonly cited reason or building own-ers and operators not going green is the perceivedhigher irst costs. A 2007 study by Davis Langdonnotes, “It is clear rom the substantial weight o evidence in the marketplace that reasonable levelso sustainable design can be incorporated into mostbuilding types at little or no additional cost. In addi-tion, sustainable materials and systems are becom-ing more aordable, sustainable design elementsare becoming widely accepted in the mainstream o project design, and building owners and tenants arebeginning to demand and value those eatures.”In act, key players in real estate and constructionregularly misjudge the costs and beneits o greenbuildings, a new study by the World Business Councilor Sustainable Development (WBCSD) reports.Respondents to a 1,400-person global surveyestimated the additional cost o building green at17 percent above conventional construction, muchhigher than the true cost dierence o about 1 to2 percent. At the same time, survey respondentsestimated buildings’ greenhouse gas emissions at19 percent o world total – hal the actual numbero 40 percent.While experienced users o the Green Building Council(Leadership in Energy and Environmental Design)LEED Green Building Certiication System are indingit possible to build at Silver and Gold LEED levelsor the same cost as conventional buildings, moststudies are inding that certiication adds only 1 or2 percent o the overall budget to the constructioncost. LEED registration and certiication ees arenegligible, averaging around $3,000 to $5,000 perproject, depending on size and whether it is a new orexisting building. (New construction requires moreinormation to be reviewed by USGBC, so the ee isslightly higher than or existing buildings.) Registra-tion is essential or projects pursuing LEED certiica-tion and provides access to a variety o resources,including LEED Online, a project management toolthat teams use to prepare documentation.Investments in building commissioning, energy model-ing and additional proessional services pay dividendsas risk mitigation strategy or owners. In act, buildingcommissioning (a quality control process ensuring thatall HVAC, plumbing, electrical and security systems are
Franchise Tax Board Headquarters Photo by John Swain, courtesy of HOK 
 
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operating as intended) provides one o the most cost-eective ways to ensure lower energy use and costonce the building is operational.According to Texas A&M University, the commis-sioning process typically reduces energy costs inexisting buildings by about 20 percent, comparedto buildings that do not go through routine com-missioning. While these might add to the projectbudget, they end up saving money in the long runand are also best practices or building design,construction and operations.When Adobe Systems Inc. earned platinum LEEDcertiication or its existing headquarters complex inSan Jose, Caliornia, which company leaders thoughtwas already high perorming, they were surprisedto learn that some o the building systems were notrunning as eiciently as they could. By pursuing LEEDcertiication, they uncovered energy waste, subse-quently saving over a million dollars annually. In act,modiications to the programming o a garage analone reduced energy consumption enough to save$98,818 yearly without sacriicing air quality!
Savings From Ongoing Operations
Once the project is operational, buildings recoupadded costs within the irst one to two years, a blipcompared with the typical liespan o a building, whichcan oten exceed 100 years. LEED-certiied buildingsuse signiicantly less energy and water than a conven-tional building. Managers o LEED-certiied buildingsregularly report energy and water savings between 30and 50 percent over their noncertiied counterparts,yielding large savings in operational costs.But beyond the obvious implications o reduced util-ity costs, the business case or green buildings asinancially sound investments is strengthened whenyou consider LEED-certiied buildings’ increasedworth. Several building projects recently submittedto USGBC show an average savings o more than$1.50 per square oot in operational expenses as aresult o management improvements and equipmentupgrades conducted to earn LEED certiication. Ininvestment properties, this translates into an at-tractive increase in net operating income (NOI) thatdelivers increased proitability year ater year.The role o green building practices and eatures isboosting the value o real estate and has appraisalexperts taking notice. According to Theddi Wright
Managers o LEED-certifedbuildings regularly report energyand water savings between30 and 50 percent over theirnoncertifed counterparts.
“
Adobe Systems, Inc. Tower San Jose, California 
 
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Chappell, the managing director and nationalpractice leader o National Green Building & Sus-tainability Practice Valuation Services or the CapitalMarkets Group o Cushman & Wakeield o Washing-ton, Inc.: “There is no doubt the market is lookingmore closely at issues such as energy eiciency anda building’s carbon ootprint in making investmentdecisions. Buildings that do not measure up in thesetwo areas alone are losing avor among investorsand in many instances are being considered lessattractive investments long term. Even though datamay not currently exist to prove up a value premiumor sustainable properties, there is a growing belie in the valuation community that i a building is notenergy eicient and high perorming, there is amuch greater likelihood its value will be discountedin the coming years.”Overall, building a new building or upgrading anexisting building to LEED standards oers a remarkablereturn on investment (ROI). Cost-beneit analysis on 10buildings recently awarded LEED certiication showsan average ROI o 29 percent or green investments.How’s that or the bottom line?
The Other Side of the Equation
One o the costliest aspects o a building is the healtho the people inside. A study conducted in 2000 bythe Harvard School o Public Health and the PolaroidCorporation ound that employee absences cost com-panies billions o dollars annually. In a study by Wil-liam Fisk, green buildings were ound to add between$20 billion and $160 billion in increased workerproductivity every year. According to many acilitymanagers overseeing LEED-certiied buildings, thesebuildings yield signiicant productivity and healthbeneits, including heightened employee productivityand satisaction, ewer sick days and less turnover.Case studies urther demonstrate that employeeswho work inside the buildings are more productiveand report greater satisaction with their workplaces,speciically identiying sunlight, views o nature andheightened thermal and acoustic comort.
Other Strategies
The most eective way to reduce higher costs is bygetting an experienced project team in place and prac-ticing the principles o integrated design. Integrateddesign engages users and operators during the designprocess so projects are able to integrate better designand understanding o building eatures and unctions.To stay on track, according to Davis Langdon’s study:
• Begin documentation early and maintain it as you go.• Update and monitor the LEED checklist regularly so you
have a clear picture o your progress.
• Use energy- and cost-modeling tools to drive decisions
at the design phase, not to validate decisions at theconstruction phase.The best response to the question, “How can you aordLEED certifcation?” may well be, “You can’t aord not to!”
Existing Buildings
LEED has been a successul tool not only or greeningnew buildings but or improving the eiciency andhealthiness o existing buildings. The commercial
Oxford - Metro Centre Photo by Shai Gil, courtesy of HOK 
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