The benefits of being green

By John P. Kreiss

Green construction and design are all the rage. In fact, the loud buzz over environmentally sustainable practices in construction and real estate development make the trend seem faddish. Every day, it seems, there's a report in the mainstream media of another major project being built to LEED standards. Green building is definitely no fad, though. It's here to stay.

Driving the green design trend are higher, more volatile energy prices, a renewed public environmental awareness stemming from global warming, more government attention and private sector support, and more attention to the long-term bottom line of building maintenance and operating costs. Recently, government agencies have fueled the trend by incorporating green design into building standards.

Green design incorporates features and materials that use less energy, water and other resources; maximize natural sunlight; and produce healthier indoor air. Demand for these attributes is increasing from owners and tenants. Clients are starting to demand greener buildings in both new construction and retrofits, and with energy costs rising every year, this trend is almost guaranteed to grow.

Green results
Green buildings do produce impressive results. Alberici Corporation's 110,000 square-foot headquarters in St. Louis, which achieved LEED's highest-ever rating, is an estimated 60 percent more energy-efficient than a similar structure built to minimum code. As a result, the construction company said it saved about $78,000 in operational costs in 2005. Granted, this is the platinum standard of green construction, but more modest green design projects also offer significant savings.

What's more, owners of some green workplaces believe a healthier work environment has boosted employee productivity. Outdoor clothing maker Patagonia reportedly attributes its investment in natural light, radiant heat, and high-exchange air circulation, among other measures, with improved productivity.

Though green construction materials and techniques can be more costly than traditional methods, the premium is smaller than it used to be. And with soaring energy costs, there is a shorter timeframe for return on investment. For companies that expect to own their buildings for a long time, the rewards of lower energy costs and healthier indoor environment are clear. For developers looking for a quick sale, green construction may seem like a poor investment, but when you consider the marketing benefits, the bottom line looks better. What's more, green construction proponents say that evidence points to green buildings commanding higher rents and resale value.

When the market is demanding greener buildings and you don't supply them, you can be sure that your competitors will. Being on the forefront of the movement and touting your green acumen at this early stage will make your firm appear innovative and more responsive to clients' wishes.

Home building lags
Single-family residential construction has been slow to go green. This may be because cost pressures on homebuyers are more significant than on commercial owners, and home building techniques are slower to change. There are some efforts underway, however, to make home building greener, and some are pushing the envelope.

Boston Green Realty is billed as "greater Boston's first green real estate office." It purports to be "leading the movement to serve green-minded real estate consumers by adding the 'green perspective' to traditional real estate services, educating consumers about energy-efficient, sustainable, and healthy design features in homes and other properties." Leland and Suzanne DiMeco, co-owners of Boston Green Realty, are Certified EcoBrokers, having completed an education and certification program designed for real estate professionals who want to help clients understand the benefits of properties' green features. The EcoBroker program was developed by EcoBroker International of Evergreen, Colorado.

"With my EcoBroker training, I have broadened the range of real estate opportunities I can offer my clients," says Suzanne DiMeco. "Whether the transaction involves environmental assessment and mitigation (for mold or radon, for example) or the opportunity to reduce utility bills, I'm in a position to help."

Consumer education is playing an important role in the green real estate movement, according to Boston Green Realty. The firm is positioning itself not only as a traditional real estate office, but also as a resource and educational center for those who seek out sustainable practices. One clear benefit of the green movement for this firm, even though they don't say so publicly, is their adoption of a terrific marketing angle.

Green marketing
Another Boston area firm that has embraced green design and construction, along with the marketing of it, is Sustainable Construction Services Inc. This design/build firm focuses on house remodeling and construction, using green building materials and techniques. As is obvious from its name, the company uses every opportunity to promote its green "cred."

I believe that more and more developers, designers, and construction firms are going to be providing green buildings and touting their ability to deliver them in the coming years. Whether your firm pegs its whole reason for being on providing green buildings or just adds green capability and services to its tool box, you can benefit from the sustainability trend.

What do you think? Let us know.

John P. Kreiss is President of MorganSullivan, an executive search firm serving the real estate and construction industries. He can be reached at jkreiss@morgansullivan.com.

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