By Deidra Darsa
Real estate developers, architects and environmentalists across the country are working together to create the next wave of modern eco-friendly projects: green buildings.
Whether it's energy conservation or recycling building products, these folks know that by utilizing solid guidelines like those developed by the U.S. Green Building Council(USGBC), it's easy being green.
LEEDing the Way
The USGBC is an industry association that has worked with building industry professionals, federal, state and local governments and utilities to define green buildings. It has done so with the Leaderships in Energy and Environmental Design, or LEED Rating System, which is used as a guideline by many in the industry.
"LEED takes a whole building integrated approach in terms of sight selection, energy efficiency, water efficiency and environmental quality," said Peter Templeton, LEED program manager. "It's not only whether the building is environmentally sustainable but also whether it is healthier to work and to live in."
Developers who build their projects based on the LEEDs system are awarded points in six areas (sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality, innovation and design process) with the most points possible being 69. And, there are four levels of certification: certified, silver, gold and platinum.
Peter Hausmann, an advocate of land conservation, designed and got approved the First Avenue Corporate Center project during his time working with Prentiss Properties. (This property, along with other Eastern properties, was sold to Brandywine REIT. However, Hausmann, now president of Terramics Property Company, Berwyn, PA, continues to oversee the project.) Located in King of Prussia, PA, this green building development is underway and, upon completion, the firm will apply for LEEDs certification.
"I know it may sound oxymoronic, being a real estate developer and being concerned about environmental issues," said Hausmann, "but, I want to practice what I preach.
"Open space and environmental issues have been long-term interests of mine," said Hausmann, chairman of the local National Lands Trust, a board member of Nature Conservancy, one of the principal architects of the Chester County, PA Landscapes land use plan, and former chairman of the Chester County Planning Commission.
He is excited about the First Avenue Corporate Center project. From the demolition of the existing 118,000 sq. ft. structure that has been ground up and reused for the base of two new 103,000 sq. ft. 4-story office buildings to energy efficient glass and energy systems to recycled steel, these new buildings are going up green.
"We're using very, very, high-energy efficient glass which reduces the need for HVAC," he said. The glass deflects the solar load and the sun on the building, which in turn will reduce the energy costs. However, when needed, the HVAC system comes with a double charcoal filter that will remove twice as many pollutants from the air. Carbon dioxide sensors will be located throughout the building and regulate the input of fresh air and each night the building will be flushed with fresh filtered air.
Furthermore, products such as carpets, wood paneling, and wall papers will be recyclable, renewable or, in the case of glues and paints, low volatile organic compounds (VOCs).
"We think worker productivity will increase because of a combination of all these things. We'll have a happier and healthier workforce," said Hausmann. "I don't want to say we're pure as the driven snow on this. We've had to make some compromises."
Some green products can be more costly than similar non-green products, but overall, the green product is the product of choice for this project. And, some suppliers have shown an openness to price negotiations, according to Hausmann.
"It depends on where you choose to spend your money," said Hausmann, noting that "many times we've gone to a manufacturer and said, ‘you're not competitive, what can we do to make it more competitive?' and they cut their price."
Green Buildings Don't Have to Cost More
In the past, developers have shied away from constructing green buildings because of the cost associated with them. But, Rocky Mountain Institute's William Browning, founder of Green Development Services and senior consultant says that's "the big lie."
"There's a big misconception that developing a green building will cost more," he said. "If you think about the project as a conventional building and the green strategies as band-aids attached to the building then you will increase the costs of construction and marginally increase performance. If on the other hand you think of it as an integrated strategy it can lead to some pretty phenomenal results.
"One of the intriguing things we learned over the last couple of years is if someone wants to do a building that uses 20 percent to 30 percent less energy than a conventional building, that building is going to be more expensive. If they say they want to do a building that uses half the energy than a conventional building, then that building will come in at the same costs. If they push it and want to use 70 percent less energy than a conventional building, then that building will cost less," Browning asserts.
Browning noted that those builders who consider the standard economic theory, in which one calculates a payment on each item before deciding whether or not to use it, overlook a critical point: as the building becomes more efficient, the need for expensive mechanical system items like HVAC equipment gets smaller.
For instance, to get to the 20 to 30 percent energy-efficient range, a developer may add more equipment, slightly better windows, more controls on lighting and more efficient mechanical equipment. That, Browning says, is an insufficient reduction in cooling loads to allow for smaller equipment and so overall material costs rise.
At the 50 percent energy savings level the decreased size of the mechanical equipment covers the increased cost of better performance windows, lighting and other environmental controls. But, when you push to the much further extreme the mechanical equipment starts getting much smaller and some components of it may go away. "You can start looking at natural ventilation, or very small cooling systems or alternative methods of cooling," he said. "Green buildings don't have to cost more."
Seeing the Big Picture
Across the country real estate developers are taking a "big picture" approach to constructing commercial properties. At Prime Group Realty Trust, office buildings are developed with advanced technology that keeps tenants in good light and air quality, and Arden Realty, Inc. has taken to using natural gas to produce electricity in some of its buildings.
The Dearborn Center project is 1.4 million square feet office and 100,000 square feet of retail, under development by Prime Group Realty Trust and M. B. Beitler Company. The developers have incorporated energy saving designs that will also make a pleasant working environment for tenants.
"It has high ceilings, floor to ceiling glass and an underfloor air distribution system," explained, Donald Faloon, executive vice president of Prime Group. "This system saves money because it runs at lower system temperature."
The underfloor air system utilizes a raised floor technology that is a modular, concrete-filled, metal pan design that allows easy access to power and communication wiring. The 62 to 65 degree air is delivered through diffusion at each work station. These can be adjusted by each person, customizing conditions to match individual preferences.
"The system makes for a lower life cycle cost because you have easy access to wiring and can relocate work stations very easily just by moving the diffusers with the stations," said Faloon.
The system also provides a higher quality of conditioned space because it ventilates from the bottom up in a displacement flow instead of blowing pollutants in a ‘churn' at occupant level, as occurs with standard systems.
"We felt that this is what's needed for office tenants going into the coming decades," said Faloon.
Arden Realty is no stranger to the EPA's Energy Star Program. EPA named Arden the 2000 Commercial Real Estate Owner of the Year and the REIT owns nearly 30 percent of all the buildings that were submitted for consideration in the Energy Star program in 2000.
"We're trying to provide a level of reliable power for our buildings and also do some load shedding," said Bob Accomondo, first vice president, asset management. "Load shedding saves money for the building because we can produce electricity with gas cheaper than it costs us to buy it from the utility company."
Arden is an investor in RealEnergy, Inc., a Los Angeles, CA, company in the business of distributed generation.
"We produce electricity on site within a building using very, very low emission-generating devices," explained Dan Cashdan, CEO and chairman of RealEnergy, who also serves as a board member of the U.S. Green Building Council. "I became interested [in green buildings] because I realized that the country and the planet at-large face immense environmental challenges over the next century. And, within my industry—the built space—there are things that can be done to reduce the footprint of buildings on the natural environment. That's what it's all about."
CalPERS Takes the Initiative
RealEnergy staff is working on several properties owned by the California Public Employee Retirement System (CalPERS). CalPERS is the largest shareholder in RealEnergy as well as a member of the USGBC.
"What we're doing is bringing these very clean energy generations and co-generation systems into 20 buildings that are under redevelopment now. We expect, over the next year or so, to do dozens if not hundreds of buildings."
"[The system] is very environmentally benign. It also helps the country with the energy shortage," said Cashdan.
According to Cashdan, 60 percent of the electricity produced in the United States is produced by burning coal. And one-third of the users are commercial buildings. "What we can do in the commercial real estate industry to reduce our consumption and to clean our consumption of electricity really matters. We can make a significant impact," he said.
The system developed by RealEnergy captures the heat or exhaust created from natural gas to create energy in buildings. The RealEnergy systems produce electricity in buildings using natural gas-driven machines, either turbines or reciprocating engines. Ultimately the system may use fuel cells and has been used with 350 Kilowatt solar panels. And, producing electricity in the building reduces stress on surrounding grids.
"It's a win-win for the community and the environment," said Cashdan. "Our systems help reduce costs because we can produce the electricity in the building a little less expensive than what people pay when they buy power over the grid."
New York in the Lead
California lawmakers are considering following New York's lead in offering tax credits for those who build green buildings. In New York City, two green high-rise buildings overlooking Teardrop Park in the Battery Park area are now under construction. Albanese Development Corporation is one of the developers constructing a 27-story, 280-unit high-rise.
"Over the years we've always tried to make our buildings energy efficient, environmentally friendly and responsible to local communities," said Russell Albanese, president. "This is the first undertaking where it's from start to finish an environmentally responsible building. And the building goes beyond local codes in the requirements to substantially improve energy efficiency by 35 percent over the current energy code in New York state. Based on our hard calculations, our building's peak electric demand will be over 65 percent less than a typical building today because we're using natural gas."
Every apartment will be supplied with dedicated outside fresh air in addition to the apartment exhaust systems. Requirements call for a high percentage of materials containing high recycled content and materials that contain low volatile organic compounds: off-gassing. For instance, carpets, paints and adhesives can off-gas formaldehyde and other chemicals.
"Sometimes that new home smell is not a very healthy smell," said Albanese.
The building will incorporate solar panels which will generate five percent of its peak electric load. And the state tax credits will defer the added expense of purchasing a gas-fired cooling system. "It costs in the neighborhood of 15 percent to 17 percent more than a standard unit."
However, these extra energy efficient costs are expected to have a direct payback in higher rents. "It'll be easier to rent because it will be a higher quality product than competing buildings," noted Albanese.
Water will be recycled, filtered, treated and used to supply toilets and cooling towers and the design calls for a planted roof garden. This building will also participate in the commissioning program with the Department of Energy and New York Energy Research Development Authority. As a participant the building will be tested on an ongoing basis to measure its green features.
"That's good in that it formalizes very stringent maintenance procedures and monitoring systems to help ensure the building continues to operate the way it was designed," said Albanese.
Deidra Darsa, a freelance writer based in Rockville, MD, is a frequent contributor to Real Estate Portfolio.
