COVER STORY, JANUARY 2012

TRENDS IN SUSTAINABLE COMMERCIAL DEVELOPMENT
Patrick Russell

Russell

In the past few years leading up to the recession, sustainable design and construction was becoming widely and increasingly accepted throughout the development industry. Green development was boosted by various rewards and financial incentives from public utilities as well as local, state and federal governments. It also was helped greatly by sophisticated early adopters among corporate users and the investor-class.

Fortunately, there was enough green awareness and commitment prior to the downturn to give sustainable development a firm footing once economic expansion resumes. For the past few years, significant new trends and advancements in green building have been embraced by the commercial real estate industry. Much of this is user- and regulatory-driven.

Many of the companies that have developed sustainable projects have used the downturn to evaluate their efforts and look for less expensive ways to achieve green objectives. This trend is likely to continue in 2012 as developers still look for ways to cut costs while maximizing a building’s efficiencies. Some are seeking alternatives to the U.S. Green Building Council’s LEED certification. This certification process adds roughly 5 percent to 10 percent through fees for consultants and applications for LEED certification and sustainable materials, depending on the level of LEED rating sought. Alternatives may achieve the same results with less cost.

One of three LEED-Gold-certified spec industrial buildings developed in Anaheim by SARES•REGIS Group. The buildings were sold this year, within eight months of their completion.

Nevertheless, in markets where sustainable development has occurred, the bar has been raised on what defines a “premium” building. The result is that sustainability is a virtual requirement for a new commercial project to be called a “state-of-the-art” Class A development nowadays. The benefits to users are significant, however. Some even have the potential to reduce their utility costs by as much as 30 percent in a green building.

It makes sense on an economic, environmental and socially consciousness level to develop a project that meets an accepted sustainable threshold, such as USGBC’s LEED programs or California’s Build It Green program. This was Sares-Regis’ experience recently when we developed Canyon Point, a three-building, Class A industrial project in Anaheim, California. Canyon Point totaled 120,000 square feet and received a LEED-Gold designation. The development included the first LEED spec industrial buildings ever completed in Orange County.

All units were sold within eight months of completion, making it a successful project from a financial viewpoint. Canyon Point also adheres to Sares-Regis’ company policy of ensuring all new ground-up developments pass the sustainability test. We are likely to see more policies like these in the years to come.

Sares-Regis is also breaking ground on the first in a collection of seven spec green corporate-headquarters industrial buildings at the Long Beach Airport’s Douglas Park. This new project, called Pacific Pointe, will be built to LEED standards and contain a total of 677,142 square feet. We expect Pacific Pointe buyers to have the same motivations as those who purchased inside Canyon Point, as we know some buyers are driven by corporate mandates to use green facilities. Others will simply want new, state-of-the-art buildings.

With these new state-of-the-art buildings, many buyers can now enjoy the eco-friendly benefits of concrete truck courts, which reduce the heat-island effect; performance glazing systems that reduce heat gains; high-efficiency HVAC systems that lower energy use; 3 percent skylight coverage that promote “daylighting;” energy-efficient lights with motion sensors in warehouse areas; pre-treated storm water that’s filtered prior to runoff; drought-resistant landscaping; and drip systems that lose less water to evaporation than sprinklers.

Depending on location, some of these added sustainable construction costs can be offset by various rewards and incentives. For example, the City of Anaheim has fast tracked approvals and deferred fees for green projects like Canyon Point. Electric utilities also continue to offer handsome rebates for energy-efficient lighting. State and federal tax incentives are additionally available for those using water-conserving plumbing fixtures.

All these wonderful building features and incentives represent a new generation of product that will give them a big edge over their competition.

Patrick Russell is senior vice president of SARES•REGIS Group Commercial Investment Division.

ECO-FRIENDLY MUSEUM HOPES TO MAKE HISTORY The new 163,000-square-foot Rio Tinto Center on the University of Utah campus is striving for LEED-Gold certification. Like Sares-Regis, the University of Utah’s green awareness began years before the recession. It was in 2005 that the Salt Lake City-based university first decided to build the Rio Tinto Center, a 163,000-square-foot facility that would contain 10 thematic exhibit galleries inside the campus’ Natural History Museum of Utah. With the center set to premiere in late 2011, many would have forgiven the school for throwing sustainability to the wayside in favor tight budgets and construction schedules. Thanks to the downturn, many projects that hit the planning stages during the height of the market never saw the light of day, but the university forged on, green design and all. What resulted was a model of sustainability that hopes to become only the 18th building in all of Utah to receive LEED-Gold certification. Today, the Rio Tinto Center features a radiant heating and cooling system, water-efficient landscaping and plans for a solar-paneled roof that could accommodate more than 25 percent of the museum’s energy needs. Local utility company Rocky Mountain Power recently partnered with the museum to provide the center with a grant for its large solar photovoltaic system. More than one-quarter of the center’s structural and architectural materials were made from recycled resources, while more than three-quarters of the project’s construction waste was recycled. This included 1,086 tons of concrete, 205 tons of wood, 154 tons of metal, 24 tons of plastic and cardboard and 2.1 tons of office supplies. Local firm GSBS Architects worked with New York-based Ennead Architects to design Rio Tinto’s green elements, which also included the parking lot’s water-proof porous pavement, rain water harvesting system and partial green roof. The university’s efforts were made all the more commendable by the strict temperature control and ventilation standards that must be adhered to in order to preserve the integrity of Rio Tinto’s 1.2-million piece collection. — Nellie Day

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