ATLANTA, June 19, 2008 - Updated with rendering of 3630 Peachtree
The cost premium to achieve LEED certification for buildings is dropping and soon could be nominal. And existing Class A buildings that stand pat and do not work to become green soon could see Class B buildings that become LEED certified command higher rental rates.
These were some of the thoughts expressed by experts in green buildings who participated in NAIOP Georgia Chapter’s “White Collar Workplaces Going Green” panel held today at the InterContinental in Buckhead.
What does LEED certification cost? “Between a 0 percent and 3 percent-5 percent cost premium,” Greg Hunsberger, chief estimator in Brasfield & Gorrie’s Atlanta office told the audience. Moreover, the cost premium “is trending down as the market becomes more accepting of it,” he said of LEED certification.
LEED certification, or Leadership in Energy and Environmental Design certification, is a rating system used by the U.S. Green Building Council. In addition to simple certification, buildings can achieve tiers of Silver Gold and Platinum certification.
In Georgia, 220 properties have achieved LEED certification, and that number represents 4 percent of the total LEED-certified properties in the country, according to panelist Chris Hoeh, a LEED accredited architect at Veenendaal Cave Inc.
The cost of not “going green” soon could outweigh the premiums associated with building or upgrading office towers and industrial buildings to be LEED certified, said Greg O’Brien, senior vice president of Transwestern. Existing buildings can be modified or retrofitted to earn LEED EB (Existing Building certification.)
“The race for LEED EB is on,” O’Brien, who has established himself as a national expert on green buildings, told the group. “The first 10 percent of buildings that get LEED EB certification will outperform the competition” and attract greater leasing activity and command higher lease rates, he said.
Worse, yet, existing properties that do not go green will become “brown buildings” by default, O’Brien said. “Green buildings are going to be viewed in the marketplace as being environmentally responsible,” he said. “Non-green buildings, or brown buildings, will be viewed as environmentally irresponsible.”
Brown-building owners can expect to feel pressure from tenants and prospects to go green” O’Brien added. “Owners and tenants [of brown buildings] also will be perceived as being environmentally irresponsible, or at the very least environmentally insensitive.”
The concept of an existing building being brown was new to David Demarest, managing director of tenant representation in Jones Lang LaSalle’s Atlanta office. Demarest deftly moderated the panel.
“I learned a new term today,” he said, “brown building.”
Developers and owners of potential brown buildings should not be daunted, Brasfield & Gorrie’s Hunsberger said. (Brasfield & Gorrie has constructed or is building several LEED-certified or certifiable buildings including 1075 Peachtree at Edelman-client 12th & Midtown and 3630 Peachtree near Phipps Plaza.
“Vendors are getting on board,” with LEED certification and bringing down pricing,” he said. It’s getting to be where it’s almost a no-brainer to do it.”
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