Creating Value in Commercial Real Estate

There is a new way to look at functional upgrades to Commercial Real Estate that is gaining traction, and it is all about the next sale. It’s not about payback period or ROI, it is about creating measurable value that can be extracted the next time the building changes ownership.

 

By now, most building owners and investors have heard that they can save money with energy efficiency measures. The hitch is often the payback period, or how long it takes to recoup the initial investment. While public sector organizations plan on keeping their buildings forever, private sector commercial real estate investors want flexibility. The 7, 10, or even 20 year payback periods that universities and governments are happy with are completely outside the comfort zone of private investors who may want to sell their building in as little as 5 years.

 

In our recent white paper, Value Creation Through Efficiency Upgrades and Environmental Considerations, we show how any functional improvement that has a positive effect on the cash flow can directly increase the sale price of the building when it next changes hands.

 

Download the PDF Here: Value Creation Through Efficiency New Axiom LLC

Or Read Online: Value Creation Through Efficiency Upgrades and Environmental Considerations

More info on our Green Associate Practice Exam

Still considering which practice exam you want to use to help you study for the LEED Green Associate Exam?  To help you decide, we wanted to share this brief walk through and a recent testimonial.

 

One recent test taker had this to say about our online Exam Simulator:

“I took the exam this morning and I passed! I really appreciate your help. That practice exam was the reason I passed, so thank you!!”

 

USGBC Needs Companies to Sign Letter to GSA

GSA + LEEDThe USGBC is looking for companies committed to Green Building and LEED to sign a letter to the GSA in support of its sustainability goals and continued use of the LEED Rating System.  Today is the LAST DAY to sign the letter, so please pass this message along, and especially up the ladder in your company.

 

To sign the letter, fill out this simple form on the USGBC website: LEED Support Letter

 

To read the letter that the USGBC is sending (written by Roger Platt) click here: Letter to Senate Signatories

 

It will only take a moment of your time to fill out the form above, and show your company’s support for Green Building and the LEED rating system.  New Axiom, LLC has signed the letter, have you?

New Fully Online LEED Green Associate Practice Exam

The interface for our LEED GA ExamThis week, New Axiom, LLC is releasing its first online tool to help you pass the LEED Green Associate Exam: a fully online Practice Exam with all of the same features as the actual computer based test.  Practice exams are the best tools available to help you study for the actual GA Exam, and we have worked hard to make our exam simulator as close to the real thing as possible.  If you are working towards your Green Associate credential, our practice exam will help you focus your study and gauge your readiness to take the real thing.

 

Our fully online Green Associate Exam Simulator can be accessed from anywhere with an internet connection, and the test is generated at random from a bank of hundreds of questions every time you start an attempt.  We add new questions every week, so you never take the same test twice.  The test is timed, just like the real thing, and it has all of the same navigation and flagging features as the actual exam in the Prometric testing facility.

 

Our exam is competitively priced, and we offer a discount to students studying part time or more.  Unlike our competitors, who limit access to 90 days, we give you unrestricted access until you pass the Green Associate Exam.  Interested in checking out our LEED Green Associate Practice Exam? For student pricing, click here.  For all others, click here.

Considering the Living Building Challenge? We Want to Give You a Free Feasibility Study.

The Living Building Challenge Living Buidling Challenge Logois the most rigorous and complete certification system for truly sustainable buildings today.  In support of this rapidly growing program, New Axiom, LLC will offer a free Living Building Feasibility Study for any project considering the Living Building Challenge.

 

LEED attempts to transform the building market by making incremental steps towards sustainably, in a sense holding the carrot out to designers and builders to move them in the right direction one step at a time.  The Living Building Challenge is an attempt to define the end goal, to describe a truly sustainable building today.  And as the name implies, it is challenging.

 

Where LEED provides points for a project meeting certain best practices, the Living Building Challenge has no points, every single item is an “imperative,” there is no half way, there is no partial credit.  And while a project can get “petal recognition” for meeting all of the imperatives in at least three categories, there are no levels of certification like there is in LEED.  Each petal of the challenge is all or nothing.

 

The challenge is for designers, builders, developers, owners and building occupants to think about the built environment differently, to solve the problems differently, and create buildings that are beautiful, efficient, and truly sustainable today.  To build buildings that are net zero energy, net zero water, and are comprised of materials that free of persistent toxins and account for their carbon footprint.  To build beautiful healthy buildings that inspire others to take up the challenge too.  We are inspired by this challenge, and want everyone else to be as well.  For that reason, New Axiom, LLC will offer a free Living Building Feasibility Study for any project that is considering undertaking this rigorous challenge to build a truly sustainable building today.

 

To learn more about the Living Building Challenge and the organization that maintains it, the International Living Future Institute, or to follow or join the conversation, check out the links below:

The International Living Building Institute website: https://ilbi.org/

Living Building Challenge on Facebook

Living Building Challenge on Twitter

 

 

LEED 2012 Delayed Again, Now LEED v4

"Dive into LEED v4"

The USGBC announced yesterday that they are once again pushing back the release date for LEED 2012, to the point that they are finally dropping the “2012″ from the next version, and just calling it “LEED v4.”   This time, however, the delay is not due to changes inspired by previous public comment periods, but rather (according to Rick Fedrizzi on the USGBC Blog) it is solely to provide time to familiarize LEED users and stakeholders with the new system before it is released.

 

LEED is a complex system, and the 2012 update is the most comprehensive and progressive step the system has seen to date.  That has led many LEED users to say that it is too much, too fast, and that it would be an unnecessary burden on builders and designers in an economy still recovering from the worst financial crisis of the millennium (so far, it is a young millennium).  With growing criticism in the conservative sectors of the US government, and dissension in the ranks of current users, the Council has wisely chosen to ease the market into the new version, and release all of the update tools and templates long before requiring people to make the switch.

 

So what does this mean for the LEED User, or for those studying to take a LEED Credential Exam?  Well it means that you can breath a little easier, because the current system, LEED 2009 is sticking with us for at least another year.  In fact, without elaborating on precisely what it means, they have announced that LEED 2009 will be available for registration for 3 years, potentially meaning that LEED v4 will be optional for 2 years beyond that, and not actually mandatory until sometime in 2014 or 15.

 

For test takers, the official position  before the announcement yesterday was that you could test on LEED 2009 until January 1, 2013, after which all tests would be based on the new 2012 systems.  But if the release date for the new system is being pushed back, you can rest assured that the version that is out now will be the one you are tested on until at least June of next year, and probably a bit later.  No official guidance has been issued on this particular point yet, but they can hardly expect GA and AP candidates to test on a system that hasn’t been released yet.

 

There is sure to be much more news on this issue in the coming weeks, and we will be sure to keep posting what it means to you, the LEED users and test takers.

Looking Back on Living Future 2012

At the beginning of this month, the vanguard of sustainable building from around the world gathered in Portland for Living Future 2012, the premiere conference (or unConference, as they style it) for sustainability in the US, and maybe in the world. We could gush about how awesome it was, how much fun we had, how great everyone was, but instead we are just going to throw some links up.

 

Gabe's Program from LF12

There were a lot of amazing sessions, and the schedule was such that choosing one meant missing 8, but for my money the best session I attended was The Bullitt Center: A Living Building Transforming How We Build and Work.  This session was centered around a new Downtown Seattle development commissioned by the Bullitt Foundation, a non-profit dedicated to ecological conservation and sustainability in the Pacific North West, which is striving to be among the first commercial buildings certified under the Living Building Challenge.  The new Bullit Center will house the Bullitt Foundation’s offices, the offices of the project architect Miller | Hull, and still have lots of leftover space for commercial leasing.

 

Graph of "True Cost" of biulding vs. Percieved CostAnother great session: The Economics of Change: Catalyzing the Investment Toward a Restorative Built Environment.  I particularly liked Jason Twill of Vulcan Inc.  and Earth Economics, also on the board of directors for the Cascadia Green Building Council.  In this picture, Jason contrasts the way in which buildings are currently valued vs. their cost, against a background of externalities, showing where everyone would want to be if those externalities were valued (apologies for posting this pic of you in the worst lighting imaginable, btw).

In the same session, Theddi Wright Chappell of Green Building Finance Consortium shared her work with how realtors and banks value properties.  Theddi is on the cutting edge of changing the way we value buildings to incorporate performance and other ecological impacts.  In a very enlightening session, she explained how real estate agencies are required to evaluate a property’s worth, and the work that she and the GBFC are doing to make lasting changes in that process.

 

While there was much more worth discussing, I think that is enough to digest in one sitting.  Thanks to Cascadia GBC, ILFI, the presenters and attendees for creating a truly inspirational experience.  We will see you in Seattle in 2013!

Research: Green Certs. (Like LEED GA) in High Demand

LEED and other Green credentials, like the LEED GA and LEED AP+ are in higher demand than ever, and the need for professionals with these credentials is only going to grow.  From a post this past Thursday on the USGBC Blog: recent research by McGraw-Hill shows that demand for green building professionals is strong, and growing so fast that soon it will exceed the number of credential holders working in the US right now.  This is great news for the green building industry, as it shows that green building continues to gain market share in both new construction and renovation sectors.

It is also great news for companies that provide training for emerging green professionals, like ours!  Because of research like this, New Axiom, LLC will be rolling out a Webinar version of our popular LEED GA Exam Prep Course.  We will be doing 2 pilot webinars to work out the kinks, and enrollment in these pilots is currently open.  Fill out the contact form on this site to get information on joining our beta testing team!

Gabe Cross elected Chair of Cascadia GBC’s Eugene Branch

We are excited to announce that Gabe Cross has been elected the Chair for the Eugene Branch of the Cascadia Green Building Council!  Before being elected chair, Gabe served as the chair of the Programming Sub-committee for 8 months, helping to facilitate the excellent schedule of green building tours and continuing education events that the Eugene Branch offered to the public.  The 2011 program was full of informative talks, like the presentation on Passivhaus Design for Commercial Construction in Europe from Peter Reppe of Solarc.  There were also several tours of new LEED certified and otherwise green buildings, like the new Ford Alumni Center at UO (anticipated LEED NC Gold), and the new Westgate Apartment Building (LEED for Homes Mid Rise, Platinum), designed by Paul Dustrud and built by Essex General Construction, Inc.

Based on his performance as the Chair of the Programming Sub-Committee, and his dedication to the branch over the last year,  Gabe was chosen to succeed Kristen Taylor as the 3rd chair of Branch Steering Committee.  As the Chair, Gabe will be working to help the branch meet the goals identified for 2012 and strive to move the branch toward the 5 year vision statement created last year under the direction of Kristen Taylor.  With the continued efforts of dedicated steering committee members, and the added support of a few new members, the Branch will continue to grow and lead the community toward a more healthy, ecologically friendly and economically thriving built environment, and 2012 may be even better than 2011.

Brownfields and LEED Sustainable Sites

In LEED 2009, with the introduction of the Regional Priority (RP) credit area, an interesting fact emerged.  In most major metropolitan regions, Sustainable Site credit 3 (SSc3), Brownfield Redevelopment, is identified as a regional priority and eligible for an additional point (California and Maryland, two states with a history of tighter environmental regulation, are notable exceptions).  This is due largely to the fact that brownfields themselves, although also found in rural areas, tend to be a particularly urban problem.

 

Not only are brownfield sites much more numerous in the urban fabric, the real estate that they occupy tends to be in much more densely developed areas and have a greater financial potential.  Problems related to both human health impacts and economic damage are therefore more acute.  Given the above, it might be considered reasonable to award more than 1 point for brownfield redevelopment, and indeed the draft changes to LEED 2012 seem to suggest that it will be worth 2 points when the new rating system is adopted.  However, selecting a brownfield site may already provide more opportunity for LEED points than SSc3 and RP credits alone can offer, and the opportunities are tied to the particularly urban character of the problem.

 

There are of course many variables when dealing with a brownfield site, and no one solution fits all of the scenarios.  Every site is unique in its location, situation, and surroundings, and not every point of this discussion will apply to all sites.  That being said, there are certain trends in urban brownfields that make them likely to be eligible for a number of other credits in the Sustainable Site (SS) credit area and this article will look at the decision to remediate urban brownfields as being central to a strategy to achieve those credits.

 

SSc1, Site Selection, is in essence a list of proscriptions.  The intent is to discourage the selection of inappropriate sites for development.  “Inappropriate sites” in this context refers to sites that perform an important ecological or human function, without being developed, e.g. greenfield sites near waterways, habitat for threatened species, or prime farmland.  A brownfield site will often be previously developed, and therefore bypasses the proscriptions for sites within 50 feet of a body of water or sites lower than 5 feet below the 100 year flood plain.  In urban areas, a brownfield site is unlikely to be considered prime farmland or habitat for a threatened species.  Therefore, if the site is not within 100 feet of an identified wetland, it is highly likely that the brownfield will be eligible for SSc1.

 

Given that brownfield sites tend to be in urban areas, they are more likely to be eligible for those SS credits that are designed to encourage density, promote development in areas that are already developed, and encourage linkages between the built environment and alternative transportation modes. Specifically, SSc2 (Development Density and Community Connectivity) and SSc4.1 (Access to Public Transit) are likely to be within the reach of many brownfield sites.

 

A site within a previously developed urban fabric is likely to meet the density requirement (option 1) of SSc2, which requires a minimum density of 60,000 sq.ft. per acre.  This equates roughly to an average 2 story development district.  A former dry cleaner or gas station (two of the most common brownfield sites) within a commercial district is furthermore likely to be eligible for the community connectivity requirement (option 2).  For this option, there must be pedestrian access to a residential district and various other services within a half mile of the building, which is easily achieved in most urban commercial districts.  For either option, it is further required that the site selected must be “previously developed.”  As stated above, most (though not all) brownfield sites are previously developed, having been contaminated by past use.  The only exception is a site contaminated by the use of a neighboring lot, but even these will typically have had at least some past use and qualify as previously developed.

 

For SSc4.1, as public transit is generally denser in urban areas, whether it be bus or light rail, a brownfield is more likely to be located within the requisite distance from a rail station or bus stops.  Each city is of course different in its approach to public transit, and poses its own unique challenges to achieving this credit, but all things considered an urban environment is generally more likely to be amenable to public transit connection.  There have even been cases of developers working with municipalities to add bus stops to existing lines to support brownfield remediation projects.

 

If SSc2, Development Density and Community Connectivity, is achieved, the requirements for certain other credits are reduced or favorably altered.  SSc5.1 and 5.2 allow for vegetated roofs to count toward the calculation of open space and habitat only if SSc2 is met.  Since SSc2 is likely to be met by an urban brownfield, these additional options for SSc5.1 and 5.2 are likely to be available.  This could significantly reduce the challenges the design team faces in achieving these credits.

 

Much of the remainder of the SS credit area has to do with design and planning, and is therefore not directly affected by the choice of whether to develop a brownfield or not.  However, the 7 credits discussed here which are entirely dependant upon the selection of the site all are favorably affected by the choice to develop an urban brownfield.  This represents 16 possible points for New Construction projects, or roughly 60% of the points available in the SS section.  Since the remaining points are based entirely on design and specification decisions, the remaining points are not necessarily made any more difficult to achieve in choosing a brownfield remediation project.

 

There are many difficulties and potential setbacks in brownfield remediation, but the potential rewards to a successful brownfield remediation project are commiserate with the associated risk.  Furthermore, state and federal government programs provide some financial support (depending on availability of funds), and local governments are often eager to provide what support they are able.  State revolving loan funds for brownfield cleanup, initially funded by the EPA, are available to anyone other than the owner at the time of contamination.  Cities often view the remediation of brownfield sites as imperative to economic revitalization efforts.

 

In summation, brownfield remediation not only benefits the community and city in question, providing economic stimulation and removing a potential health risk, it can provide an excellent jump start to a green building team seeking LEED certification.  By removing barriers to some credits and fitting intrinsically with others, the choice to remediate an urban brownfield is an excellent start to maximizing the potential points in the Sustainable Sites credit area.