As Part 2 of our series of posts on Sustainability in advance of Earth Day on April 22nd, we focus on LEED certification.
For Part 1 – Intro/State of Sustainability in Boston
LATER THIS WEEK:
Part 3 (Wednesday) – WELL Certification (and how it differs from LEED)
Part 4 (Thursday) – Sustainability Without a Certification
Part 5 (Friday) – Sustainability ROI and Leases
While there are dozens of programs focused on sustainability around the globe, the LEED program is generally considered the primary certification in terms of sustainable commercial real estate design, construction, and management in the U.S.
In Boston alone, there are 412 projects which qualify as LEED, or are in the process of being certified under some version of the program. Participating projects cover all types of properties, such as the New England Aquarium, Vertex’s Headquarters in Fan Pier, Eataly Boston at Copley Square, and the interior of Cushman & Wakefield’s own Boston offices at 225 Franklin Street.
Massachusetts was also the top LEED state in the country in 2016, with more than 24 MSF of space, including the Boston Convention and Exhibition Center, earning certification last year.
While grouping all of the LEED Certification paths together is somewhat over-simplified, the general concepts behind LEED Certification are what typically come to mind when the concept of sustainability in commercial real estate is discussed.
The program has different rating systems for all phases of development, including Building Design, Interior Design, Building Operations and even Neighborhood Development.
Each of those programs focuses on nine different subject areas:
- Integrative process
- Location and transportation
- Sustainable sites
- Water efficiency
- Energy and atmosphere
- Materials and resources
- Indoor environmental quality
- Regional priority
Each of those subject areas is broken up into different goals and objectives, through which a project can earn points based on how well it meets the criteria.
For example, a property manager seeking a Building Operations Certification may install low-flow water fixtures. They can earn one point for changes which cut water use 10 percent below baseline levels, all the way up to five points for changes which result in 30 percent less water usage.
Once documentation for all of those programs has been submitted and approved, those points are added up across the entire program and translated into a certification level – ranging from LEED Certified (40-49 points) all the way to LEED Platinum (80-120 points).
The savings earned through those programs are eye-opening, with the U.S. Green Building Council saying that from 2015-2018, LEED-Certified properties will create more than $2.1 billion in savings on energy, water, maintenance and waste.
However, getting a certification isn’t always easy in some situations. Alex Spilger, a Senior Vice President of Sustainability Services at Cushman & Wakefield – who is both a LEED and WELL AP – says that the feasibility of formal certification tends to vary depending on the property and its location.
For example, he notes that projects located in suburban or rural areas regularly have difficulty earning credits for walkability and public transportation. Fewer viable options can make the path to certification more challenging and perhaps less cost-effective.
The benefits of a certification also go beyond operating cost savings, with the USGBC touting strong benefits in terms of rents and leasing.
The group says lease-up rates for green buildings can be 20 percent above average, with higher rents and below-average vacancy rates. Investors also received benefits, anticipating an additional 5 percent increase on building value as well as stronger ROI after a sale.