LEED Certification

[dalai]

I'm stating discussions for a new 30,000SF Office building in the Museum District and the topic of LEED certification came up. The commissioning and documentation fees are almost 15% of the entire design and engineering budget, not including what the USGBC will charge for their portion.

My question is: 1. Is this worth it? 2. Would this money be better spend towards "greening" the building without pursuing LEED certification(Spend the money towards hard assets instead of documents)? 3. Does a LEED certification mean anything to future tenants, buyers, lenders?

[editor]

I'm stating discussions for a new 30,000SF Office building in the Museum District and the topic of LEED certification came up. The commissioning and documentation fees are almost 15% of the entire design and engineering budget, not including what the USGBC will charge for their portion.

My question is: 1. Is this worth it? 2. Would this money be better spend towards "greening" the building without pursuing LEED certification(Spend the money towards hard assets instead of documents)? 3. Does a LEED certification mean anything to future tenants, buyers, lenders?

I'm no expert in the filed, but from what I've observed, it's something to think about.

Large developers and REITs are spending millions of dollars to turn their old office buildings into LEED-certified buildings. There must be a reason they're doing so. I would think it has to do with tax credits, charging higher rents, or something money-related. I simply don't believe that Hines would spend eight figures on an old building just for the warm fuzzies of a LEED certificate.

In residential, I know that on the west coast, the few LEED-certified apartment and condo buildings are pushing that hard as a selling feature. Even non-LEED "green" buildings are using that as a big selling point, often the #2 or #3 item on the bullet list.

I would assume that making a building LEED-certified would be cheaper from the outset than retrofitting it later. But that's really something for you to discuss with your architect.

[TheNiche]

I'm no expert in the filed, but from what I've observed, it's something to think about.

Large developers and REITs are spending millions of dollars to turn their old office buildings into LEED-certified buildings. There must be a reason they're doing so. I would think it has to do with tax credits, charging higher rents, or something money-related. I simply don't believe that Hines would spend eight figures on an old building just for the warm fuzzies of a LEED certificate.

In residential, I know that on the west coast, the few LEED-certified apartment and condo buildings are pushing that hard as a selling feature. Even non-LEED "green" buildings are using that as a big selling point, often the #2 or #3 item on the bullet list.

I would assume that making a building LEED-certified would be cheaper from the outset than retrofitting it later. But that's really something for you to discuss with your architect.

There are different kinds of LEED programs, and the designation that governs existing buildings is far more economical than the one that governs new construction. A lot of it just has to do with modifying property management practices.

Although no there are no tax advantages to LEED certification, Hines is convinced that an office property cannot truly be 'Class A' unless it is LEED certified. They may be right. Most office leases entail that the tenant reimburse the landlord for their utilities expenses, so the LEED designation stands as a popularly-recognized endorsement of a building's efficiency relative to other buildings, and would be considered more attractive to the tenant as compared to a similarly positioned building marketed with the same base rents that doesn't have the little LEED logo.

It doesn't hold up as well for retail, industrial, or apartment properties because different tenants can have vastly different utilities requirements and efficiency issues, and also because consumers and employees tend to be less aware that a building is LEED certified (if they know what it means). And it doesn't hold up well with hotels because...and this is the telling part...efficiencies achieved through LEED certification that offer a financial benefit are bundled with other requirements that range from the thoughtful to the absurd and from inconvenient to possibly quite expensive. And all along the way, there are administrative costs to monitor compliance with the program, which are substantial.

The bottom line is this. LEED has more to do with marketing or ego than actually being green. If a property owner only cares about being green, there are better ways at going about it than even many of the criteria that LEED suggests. Foremost, that property owner should build and occupy a smaller and minimally-adorned space. (But since the U.S. Green Building Council relies so heavily on architects to push their product for them, and architects desire to achieve the highest possible billing on their projects, you'll never hear the USGBC say that or see it reflected in LEED criteria.)

[lockmat]

consumers and employees tend to be less aware that a building is LEED certified (if they know what it means).

Our pest control rep came to talk to me a few months ago asked me if I knew what LEED was and when I said yes he was shocked. He said it's rare that anyone knows what it is, even the uppers in the Medical Center, the big wigs making big decisions! I was shocked at that.

[TheNiche]

Our pest control rep came to talk to me a few months ago asked me if I knew what LEED was and when I said yes he was shocked. He said it's rare that anyone knows what it is, even the uppers in the Medical Center, the big wigs making big decisions! I was shocked at that.

I'm not shocked. Moreover, I think that their ignorance of the LEED racket is a good thing. Most people don't see past the surface and are easy suckers for that kind of stuff. ...especially when someone else is responsible for cutting the check.

[dalai]

Thank you for all of your replies.

I just feel that I can get my Mech.E.P. engineers to designs according to or exceeding the LEED standard and not pursue the certification from the USGBC. This would save a lot of money and time, not having to prepare and submit the paperwork to the USGBC. I would still have a "green" building, which would reduce the utility expenses for the occupants, but it wouldn't be able to advertise it as LEED. Would I be shooting myself in the foot with this strategy?

[TheNiche]

Thank you for all of your replies.

I just feel that I can get my Mech.E.P. engineers to designs according to or exceeding the LEED standard and not pursue the certification from the USGBC. This would save a lot of money and time, not having to prepare and submit the paperwork to the USGBC. I would still have a "green" building, which would reduce the utility expenses for the occupants, but it wouldn't be able to advertise it as LEED. Would I be shooting myself in the foot with this strategy?

Only pursue LEED if it is an office building in a suitable location and of sufficient size and quality that institutional buyers (i.e. TIAA-CREF, USAA, Unilev Capital, KBS REIT, Hines Global REIT, etc.) would express interest when you're ready to sell. That's something that the big players look for.

If your building is anything else, and particularly if it is a smaller property or serving a niche tenant, build it green and advertise the fact. A word of caution, however...the LEED criteria and scoring system are intentionally structured that it is impossible to claim that a building outperforms LEED in any way. Be very cautious of how you compare your building to LEED for promotional purposes or in the press, as it may open you up to a defamation lawsuit.

[dalai]

Only pursue LEED if it is an office building in a suitable location and of sufficient size and quality that institutional buyers (i.e. TIAA-CREF, USAA, Unilev Capital, KBS REIT, Hines Global REIT, etc.) would express interest when you're ready to sell. That's something that the big players look for.

Although the location may be suitable, at 30,000SF - a third of which will be occupied by the owners, I doubt that the size would be attractive to institutions. I don't know for sure.

If your building is anything else, and particularly if it is a smaller property or serving a niche tenant, build it green and advertise the fact. A word of caution, however...the LEED criteria and scoring system are intentionally structured that it is impossible to claim that a building outperforms LEED in any way. Be very cautious of how you compare your building to LEED for promotional purposes or in the press, as it may open you up to a defamation lawsuit.

The more I think about it, this is the strategy we should take. Thanks again for all of your input.

[Ivey66]

I want to get a degree in Environmental Sciences. I am currently working with a development company and it would benefit me to have a LEED certificate to get better pay while I am in school.

How exactly do you get a LEED certificate? I have researched my local colleges and got no answers! I even Google searched it and nothing really came up. Any suggestions?

[TheNiche]

I want to get a degree in Environmental Sciences. I am currently working with a development company and it would benefit me to have a LEED certificate to get better pay while I am in school.

How exactly do you get a LEED certificate? I have researched my local colleges and got no answers! I even Google searched it and nothing really came up. Any suggestions?

Here you go.