A new trend has arrived in commercial office buildings. Landlords and leasing agents should get used to being asked, Is your building LEED certified? New construction and existing buildings are being built or modified to fit the Leadership in Energy and Environmental Design (LEED) Green Building Rating System. LEED promotes a whole-building approach to sustainability by recognizing performance in five key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental quality. Whether you are platinum, gold, silver or certified, having the certification is prestigious and will soon if not already influence where tenants want to office.

Over the next five years major Fortune 500 corporations will demand LEED Certified buildings. Sustainability and corporate social responsibility are rapidly becoming mainstream business issues at the very highest levels of the multinational corporation. Sustainability is about living and working in ways that meet and integrate existing environmental, economic, and social needs without compromising the well-being of future generations. Corporate social responsibility refers to corporate behavior that demonstrates open and transparent business practices based on ethical values and respect for employees, communities, and the environment. As sustainability issues move higher up the corporate agenda, Commercial Real Estate and infrastructure leaders will have a significant opportunity to contribute to the sustainable performance of their enterprises. Equally, they will be under increased pressure to demonstrate that they are making such a contribution.

Commercial buildings in the United States consume over 18 percent of all energy use in the country. This number is projected to increase dramatically over the coming years. LEED gives building owners and operators the tools they need to have an immediate and measurable impact on their buildings performance and reduce operational costs in the short term and long term.

Houston will probably be at the forefront of this movement because of the large number of energy related businesses located here. Energy firms are particularly sensitive to environmental issues. Doing business in a LEED certified office has become part of the way that energy firms address the public image issues that arise from the large profits they realize extracting natural resources.

The USGBC (United States Green Building Council) has developed rating systems for all aspects of a built environment. LEED is a tool to verify green building performance on a consistent scale which is intricately linked with Energy Star. Without and Energy Star rating a commercial building cannot be LEED certified. It is voluntary, performance based, leading-edge, and ever evolving as new technologies, knowledge and research emerge in green buildings.

The LEED certification covers four different aspects of the construction process. These categories include:
LEED for New Construction (NC)
LEED for Existing Buildings (EB)
LEED for Commercial Interiors (CI)
LEED for Core and Shell (CS)

The levels that can be achieved beginning at the highest are Platinum, Gold, Silver and Certified.

The U.S. Green Building Council’s core purpose is to transform the way buildings and communities are designed, built and operated, enabling an environmentally and socially responsible, healthy, and prosperous environment that improves the quality of life. Owners typically are not willing to spend the dollars to become LEED certified at this stage of the game. In the next few years they will be forced to comply to stay competitive in the marketplace.

In addition to the operating benefits, LEED is beneficial to owners because there are substantial tax rebates, zoning allowances, and other incentives that go along with it. The savings of being a green building often dwarf a less efficient building in the long run.

High energy prices present building owners with a fundamentally different operating environment. In the next two to three years you will see several buildings switching over to LEED Certified New Construction and Existing Buildings. One of the important factors is if you own a less efficient building as energy costs increase, higher rents will be required to support operating costs. This will make the less energy efficient buildings more difficult to lease as tenants face the possibility of greater pass-through of energy costs than in more energy efficient buildings. Energy efficiency is now a characteristic that building owners and investors should make essential to consider when valuing a property.

Transwestern is a member of the USGBC and represents the only third party Real Estate Service Company participating in the portfolio pilot program for LEED EB (Existing Building). Transwestern has registered a number of projects around the country and are working towards LEED certification as part of the USGBCs initial portfolio efforts.