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CRE Pros OK With Burying The LEED

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Ask Anthony Malkin about LEED and he’ll tell you how he really feels.

The chief executive officer of Empire State Realty Trust thinks the clean air certification for buildings (officially Leadership in Energy and Environmental Design) is a good starting point, but it doesn’t do much for tenants or landlords. Instead, it’s all about keeping energy costs low in buildings with new technologies as opposed to a points system for miniscule things.

“We have a very good adviser who said if you don’t get LEED, it’s going to be very difficult for you to criticize it. So we did,” Mr. Malkin said as a panelist at Commercial Observer’s “Upgrade New York” breakfast last week. “The concept that you get a point for harvesting bamboo in Indonesia, putting it on a boat that stops by Fiji and picks up a bottle of water…Brings it to a port in L.A., which then takes it in a train across the United States and is put on the floor of an office in New York City, and you get a point for that? That’s just freaking absurd.”

His fellow panelists agreed that a new tenant, particularly in the tech sector, wants a building that can keep the energy bills low more than anything. But the strongest comments came from Mr. Malkin, whose revamped his Empire State Building now uses less energy with state-of-the-art measures such as lights that dim when the room is empty or is getting more sunlight, and elevators that reuse energy from their breaks to power upward elevators.

“This is the most efficient building of its size of any age in the United States that’s occupied,” Mr. Malkin said. “We have an energy intensity unit, or energy unit intensity of 72 in this building. The median in New York City is 218. It is no colder, it’s no hotter. It’s no darker. There are no fewer elevators.”

His tenants might not even know the building is LEED certified, which judges how environmentally friendly it is based on the number of points it has for things such as bike racks and emissions. Many technology and emerging companies are more concerned with how much energy a building uses than its ranking on the LEED scale, said co-panelist Sacha Zarba, an executive managing director at CBRE who specializes in tech tenants.

“LEED doesn’t hurt,” said Mr. Zarba, who represented LinkedIn in its leases at the Empire State (it now has 160,000 square feet). “From a tenant perspective, it’s not a box that usually needs to be checked. It’s important to LinkedIn—the energy efficiency and sustainability of a building—but LEED as a word is not.”

View a video of Anthony Malkin, Chief Executive Officer Of Empire State Realty Trust, discussing LEED certification below:

 

Source: Commercial Observer

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Report Says Incentives Make Going Green Easier For Commercial Landlords

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Providing better incentives and more financing options are among the ways to encourage commercial building owners to invest in green technology in Houston, a report concludes.

The recent report unveiled at Rice University includes an action plan with recommendations that could apply to a range of buildings, from the smallest strip centers to the tallest towers. The report follows a three-day workshop, the Houston Energy Efficiency in Buildings Laboratory, that brought business and city leaders together in October to discuss how to save energy in the commercial sector by at least 30 percent. The group said this saving would contribute to more than $500 million in the local economy, enough to power 10 midsize power plants.

Houston was one of the first cities in the world targeted for this effort, sponsored by the World Business Council for Sustainable Development and the United States Business Council for Sustainable Development. Previous cities were San Francisco, Shanghai, Mumbai and Warsaw.

William Sisson, co-chair of the World Business Council for Sustainable Development, said some of the same roadblocks found in Houston exist in other cities that have been part of this effort. He said local support is key. “In my experience, the business community is definitely out in front and looking for ways to save cost, enhance the bottom line and make their assets more attractive,” Sisson said. He said the challenges are to communicate to individuals the larger benefit of such investing, ensuring there is adequate capital available for them to do so and making sure that public policy keeps up with what the market is doing.

Good For Society

A condenser pump at 2 Houston Center helps save energy. A report calls for more financing options for green energy. Photo: Gary Fountain, Freelance

A condenser pump at 2 Houston Center helps save energy. A report calls for more financing options for green energy. Photo: Gary Fountain, Freelance

The final report essentially argues that it makes business sense to invest in energy-efficient technologies. It also appeals to the public sector, saying that reduced air pollution and improved public health will be a societal good. It focuses primarily on lower-tier building owners who have been more reluctant to invest. Action-plan items include raising awareness of the benefits of energy efficiency in buildings, targeting communications and providing case studies to building owners.

The plan includes financing solutions, such as energy service agreements that reward companies for reducing energy usage, and calls for creating more transparency in collecting energy data on buildings because owners may not have access to their tenants’ energy output. Strategies recommended by the panel include raising awareness through city initiatives and publicizing how much money companies can save through more efficient operations.

Already in Houston, the top tier, or Class A, office buildings compete for LEED certifications and energy-efficient building has become standard. Yet the lower-tier class B and C owners and tenants are less aware of the role and importance of energy efficiency. Those owners also do not have the scale or structure to pursue energy efficiency investments. The report concluded that incentives offered for green building do not do enough for the smaller owners and operators.

Mayor’s Goals

The report said that while Houston has progressive building codes, their reach and enforcement are limited, even as green building has become a focus for Mayor Annise Parker. She announced goals to reduce greenhouse gas emission by80 percent from 2005 levels by 2050. Emissions already have fallen by 32 percent since 2007. The city has also launched the largest LEED-streetlight conversion in the country. The report says Houston is ranked fifth nationally for the number of LEED-certified projects, with 369.

Gavin Dillingham, research scientist with the Houston Advanced Resource Center, which will lead the effort to create awareness and promote new policies in the area, said he hopes to show business owners why energy-efficient practices are good for business and show the government that these practices have societal benefits. “We need to be ahead of the curve and operate as efficiently as possible,” Dillingham said. “There is definitely an opportunity to improve.”

 

Source: Houston Chronicle

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