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In an interview, Ashley Katz, communications coordinator for the Washington DC-based US Green Building Council, talked about green building. On how soon green will become the norm, Katz said they're seeing an obvious market transformation already occurring. Currently, 3.2 billion square feet of commercial space are involved with LEED, and that number grows each day. On what point it will be uneconomical not to go green, Katz said it's already uneconomical to build the conventional way. Energy prices are soaring, and green buildings save 30% to 50% on energy, which can really reduce operating costs and energy bills. She added that green buildings are better for the bottom line -- hands down.

Copyright Stamats Communications, Inc. Jun 2008

The results of two recent studies show that green buildings outperform non-green buildings in occupancy, sale price, and rental rates - sometimes by wide margins. Studies conducted by Bethesda, MD-based CoStar Group Inc. and the White Salmon, WA-based New Buildings Institute (NBI) indicate that property investors and tenants are looking for buildings that have earned LEED® certification or the ENERGY STAR® label because they're increasingly viewed as financially sound investments.

Ashley Katz, communications coordinator for the Washington, D.C.-based U.S. Green Building Council (USGBC), answers the following questions for Buildings readers.

Buildings: According to these studies, green buildings are outperforming their non-green equivalents in many key areas. How soon will green become the norm?

Katz: We're seeing an obvious market transformation already occurring. Currently, 3.2 billion square feet of commercial space are involved with LEED, and that number grows each day. Reports like the CoStar and NBI studies will convince project owners and managers that, if it's not green, it's not Class-A building space.

Buildings: At what point will it be uneconomical to not go green?

Katz: It's already uneconomical to build the conventional way. Energy prices are soaring, and green buildings save 30 to 50 percent on energy, which can really reduce operating costs and energy bills. And, while many think that green building costs more, the upfront costs for a high-performance office building average only 1 to 2 percent of the overall budget. The average return on investment is 20 percent over the building's lifetime. Add in the health and productivity benefits for the building's occupants, and the benefits for the environment, and it's clear that green building makes both economic and environmental sense.

Buildings: How soon will owners and managers of green buildings see higher occupancy and rent rates?

Katz: Both are immediate and often happen before the building is ready to open. In fact, a lot of high-rise office projects sell out quickly because the projects [are] marketed as green, and that has been shown to attract potential tenants right off the bat.

Buildings: Why is going green particularly important in today's economic environment?

Katz: Green buildings are better for the bottom line - hands down. The USGBC used to tout the environmental benefits; now we talk about the business benefits - everything from reducing utility bills by 30 to 50 percent to using 40-percent less water. Those stats are just the hard, economic savings, but occupants are also healthier, happier, and more productive. In fact, employees in green buildings have fewer sick days and decreased turnover.

Companies like Pittsburgh-based PNC Bank (which has committed to build more than 170 LEED-certified bank branches), the Bank of America Tower in New York City (LEED Platinum), and Adobe (with LEED-certified corporate headquarters in San Jose, CA) are leading the way. They know it's better for the bottom line, and they have the competitive edge.