The 2010 U.S. Green Building Market

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Jerry YudelsonYudelson Associates

2010

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Jerry Yudelson

• Green building involvement with USGBC since 1997

• Author of 12 books on green building subjects since 2005

• Technical/Marketing Consultant to Fortune 500 companies, real estate investors, software companies, manufacturers and design/construction firms

• Trained 3500 people in the LEED system since 2001; former USGBC Board member

• Organized and chaired Greenbuild, largest US Green Building conference and expo, 2001-2009

• Research scholar for retail real estate sustainability, International Council of Shopping Centers

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Take-Aways

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The Big Picture (BP)

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Green Building Important for Carbon Reduction

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Importance of Building Green

In the year 2035, 75% of 2005’s U.S. built environment will be either new or renovated.

The U.S. will transform its energy consumption and CO2 production by constructing & renovating most buildings to green standards.

McDonalds Corp. HQ

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Our Opportunity to Build Green

Current US building stock is approx. 300 billion sf.

Over the next 30 years:

• 52 billion sf will be demolished• 150 billion sf will be remodeled• 150 billion sf will be new construction

Therefore, by the year 2035, three-quarters of building stock will be new or renovated vs. 2005

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Life Cycle Positive Solution

Buildings are the only Life Cycle Cost-positive solution

25% of total carbon solution can come from buildings, including homes, stores, offices, hotels, institutional buildings and other structuresChoosing GreenChoosing Green

Choosing Choosing GreenGreen

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Green Building Is Growing Rapidly

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Green Building Statistics

USGBC: 18,000+ members

LEED Commercial Projects

28,000 registered (July 2010)

6,000 certified (July 2010)

Ave. size ~ 100,000-sq.ft.

LEED for Homes

6800 certified, 27,000 registered (June 2010)

155,000+ LEED Accredited Professionals

OREGON

HEALTH & SCIENCEUNIVERSITY

“In God We Trust; All Others Must Bring Data.”-W. Edwards Deming

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LEED Growth Accelerates!

2005 to 2006: +50% cumulative growth in new LEED registered projects

2006 to 2007: +75%

2007 to 2008: +80%

2009 to 2010: +70%

New York City

$1 billion

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LEED Growth - Project Registrations

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LEED Growth – Project Certifications

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LEED-New Construction Registrations

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US Green Building Market Projections

Source: EL Insights, http://tinyurl.com/2egzhub

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Business Case for Green

Financial/economic return

Risk mitigation

Marketing/public relations

Productivity/health gains

Recruitment/retention

Sustainability concerns

Northfield Stapleton, DenverLEED

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Proven Benefits

Absenteeism(15%)

Carbon Emissions(35%)

Energy Costs(30%)

Hospital Stays(2.5 Days)

WasteManagement Costs

(50-90%)

Water Usage(30-50%)

Performance on School Tests

(20%)

Retail SalesPer Square Foot

FactoryProductivity

Office Productivity(2.8-20%)

Occupancy Rates(3-4.1%)

Rental Rates(up to 174%)

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CoStar Study Results

Energy Star Buildings vs. Peers (~1,000)

$2.40/sf Rent Premium!

3.6% Higher Occupancy!

Selling for $67/sqm more!

LEED Certified Buildings vs. Peers (~360)

$11.33/sf Rent Premium!

4.1% Higher Occupancy!

Selling for $1870/sqm more!

Clinton Presidential Library, Little RockLEED Platinum

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LEED Rent Premium

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RICS Study Results

2008 Data: 893 certified

buildings, 10,000 non-

certified within ¼ mile

Conclusions: Effective rent 6% higher Sales price 16% higher Green upgrade would

add $5.5 million to average value

MarksMarks && Spencer Spencer Plan APlan A MarksMarks && Spencer Spencer Plan APlan A

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Most costs are “people costs”

Studies show 3-7% gain in workplace productivity

A 1% gain in productivity pays all the energy bills

A 10% gain in productivity pays for the entire building (or the technology)!

Productivity Counts

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2010 LEED Predictions

• New buildings: – 10,000+ new LEED

project registrations– 2000 new project

certifications– Value of new LEED

project registrations in 2010: $100 to $150 billion

Global Ecology Center, Stanford University

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Greening Existing Buildings: The Next Big Challenge

Must improve existing buildings to meet carbon reduction goals

Very cost-effective to cut energy/water use by 30% to 40%

Many outstanding examples worldwide

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Greening Existing Buildings: Next Big Challenge

• Need to green existing building stock rapidly

• Huge opportunities, many challenges

• Over 4,100 LEED-EB buildings registered– Avg.: 300,000-sq.ft.

• Example: CBRE– 100 buildings certified

• Example: Chicago Merchandise Mart– 4 million-sq.ft. Adobe Systems HQ, San Jose, CA, 1 million-

sq.ft.LEED-EB Platinum

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Empire State Building

Key Players: Jones Lang LaSalleJohnson ControlsClinton Climate Initiative

Completion: late 2012All projects

38% expected energy savings$4.4 Million Savings!Goal: LEED-EB Gold

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Urban Water Use

• Urban water concerns are likely to increase

• Good design & practice can reduce water use +50% in buildings

• Retrofits can reduce water use 35% to 75%

• Australia is the case study, the testing ground– 150 liters/capita/day– U.S: 150 gallons/cap/day!

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Greg Kats: Greening Our Built World

• 14% reduction in CO2, 2025 vs. 2005

• NPV of green building: $650 billion in U.S.– 5x to 10x cost premium

• 2020 Prediction: – Green buildings 95% of

new construction– Green retrofits are 75%

of all retrofits

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6 Good (Green) Marketing Ideas

• Differentiate your offerings• Become a low-cost provider of

products for zero-carbon projects– Tout UK/EU experience

• Educate the market– Use available Eco-Labels

• Bundle green features– create branded efficiency, green or

renewable products/systems

• Present the business case better– Show full suite of user benefits

• Become a green brand– Existing buildings opportunity

Helena Apartments, New York City LEED Gold

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The Future is Green, But…

If you want to score, run to where the ball’s headed, not to where it is now.

Ask yourself: how green will the built environment be in 2015? What will be the New Normal?

Non-performing green buildings will pay a penalty in that market!

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Conclusions?

• Green building is here to stay– Pace of adoption is accelerating– Green buildings & homes– Renewable energy & efficiency go with green building

• Still concern over actual building performance– This will be addressed in next 3 to 5 years– Buildings will fully integrated using “cloud”: SaaS

• Expect more green mandates (+200 jurisdictions now)

• Focus shifting to greening existing buildings

• Opportunities abound for nimble companies

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Further Resources

Books by Jerry Yudelson:

Dry Run: Preventing the Next Urban Water Crisis (2010)

Greening Existing Buildings (2009)

Sustainable Retail Development: New Success Strategies (2009)

Green Building Trends: Europe (2009)

Green Building through Integrated Design (2008)

Choosing Green: The Home Buyer’s Guide to Good Green Homes (2008)

Green Building: A to Z (2007)

The Green Building Revolution (2007)

Marketing Green Building Services: Strategies for Success (2007)

The 2010 U.S. Green Building Market

Business

Transcript of The 2010 U.S. Green Building Market