1. 1 MOTIVATIONS AND TRENDS

2. Slide header copy In This Chapter >Sustainability in commercial property >Quantitative motivators >Qualitative motivators >Client types 1-1

3. Slide header copy Market Size 1-2 >Demand for sustainable properties, certified buildings, green features, and sustainable commercial interiors has grown in last several years

4. Slide header copy Projected Growth 1-1 1-3 Source: Reprinted with permission of McGraw-Hill Construction, Commercial & Institutional Green Building: Green Trends Driving Market Change, New York, NY: McGraw-Hill Construction; 2008.

5. Slide header copy Quantitative Motivators 1-4 >Use caution when presenting results from studies >Study of quantitative return from sustainable property is work in progress >Methodological challenges may produce “outlier” results

6. Slide header copy 1-1 1-5 >According to one of largest national studies available, sustainable properties:  Gain value at rate similar to or slightly better than comp. conventional properties  Hold similar or slightly reduced investment risks compared to like properties Sustainable Property, Value, and Investment Risk Source: Pivo, G. and J.D. Fisher. “Investment Returns from Responsible Property Investments: Energy Efficient Transit-oriented and Urban Regeneration Office Properties in the US from 1998- 2007,”www.responsibleproperty.net/assets/files/pivo_fisher_10_11_08.pdf

7. Slide header copy Decreased Operating Costs >According to EPA and DOE, significant payback is available from low- to medium- cost upgrades:  Recalibrating thermostats  Relamping with higher efficiency fluorescent bulbs  Changing incandescent bulbs to compact fluorescent lamps (CFLs)  Using ENERGY STAR–labeled equipment 1-6

8. Slide header copy Projected Cost Savings for Low-cost Changes 1-1 1-7 Source: Reprinted with permission of McGraw-Hill Construction, Commercial & Institutional Green Building: Green Trends Driving Market Change, New York, NY: McGraw-Hill Construction; 2008.

9. Slide header copy The Win-Win-Win 1-8 >Reduced energy consumption a win-win-win:  Increase profit margin for the owner  Bring down costs for tenants  Reduce carbon emissions and conserve natural resources

10. Slide header copy Payback from Upgrading UAD Systems 1-1 1-9 Note that churn cost is cost of replacing employees and includes advertising cost, employee training, and lost productivity

11. Slide header copy Improving Efficiency and Saving Costs: Adobe Towers 1-1 1-10

12. Slide header copy Discussing Payback with Clients 1-11 >Examples of payback may not be replicated in client’s situation. >Large-scale changes should be energy-modeled for impact on whole building system. >Changes in efficiency of one system may affect other systems. >The higher the going-in energy cost, the shorter the payback period.

13. Slide header copy Increased Tenant Retention 1-12 >Tenant retention can be quantified for ROI as avoided costs in tenant replacement

14. Slide header copy 1-1 1-13 Qualitative Motivators >Marketing value for corporate clients and tenants >Employee productivity and health >Lower risk of decreasing value/obsolescence >Staying ahead of regulation

15. Slide header copy Marketing Value 1-14 >Market differentiation >Benefit to the financial performance of the company >Early market entry = long-term consumer loyalty

16. Slide header copy 1-1 1-15 Value of Supporting Productivity and Health >Reduced absenteeism >Longer term employee loyalty gains >Increased productivity >Ability to attract and maintain high quality workers

17. Slide header copy Building Green and Reduced Risk 1-16 >Reduced risk from employee health liability >Reduced climate change liability >Protection from increases in resource cost >Protection from sprawl >Reduced risk from future government regulation

18. Slide header copy 1-1 1-17 Examples of Regulation Case Studies >Seattle >Boston Sources: Photo of Seattle Public Library reprinted with permission of King County Seattle Public Library, “About the Library,” www.spl.org/default.asp?pageID=branch_central_about&branchID=1. Photo of One Beacon Place Reprinted with permission of CB Richard Ellis. One Beacon Street: One Beacon Is Going Green!, www.1beaconst.com/goinggreen.html.

19. Slide header copy Exercise: Reduced Risk and Sustainability 1-18 >Consider the example of Building Green and Building Blue. >In the spaces provided, write your answers.