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It Pays to Be Green

Green design isn't just for a few trendy owners anymore. These days, even the Department of Defense, a federal agency not known for its environmental consciousness, is incorporating all kinds of green technology in the ongoing renovation of the Pentagon.

The Department of Defense is investing in insulated windows and advanced energy control systems at the massive 6.6 million sq. ft. Pentagon office building in order to trim its monthly $1.1 million electric bill via better load management.

The khaki crowd may be on to something. By installing advanced energy control systems and following the development guidelines of the U.S. Environmental Protection Agency (EPA) and the U.S. Green Building Council, green-savvy architects and engineers are capable of trimming energy costs by up to 40%.

Though the commercial real estate industry has been traditionally slow to adopt technological change, more owners and developers are investing in electronic controls that monitor energy consumption and information systems that improve maintenance procedures.

Office owners and developers also are enrolling in programs such as Leadership in Energy and Environmental Design (LEED) that provide guidelines for implementing energy-efficient systems.

Owners that install green technology receive a significant payback on their investment, says Marty Olhava, a construction manager in the Chicago office of Hines, one of the country's largest office developers. Olhava specializes in energy systems maintenance.

“These sophisticated control systems that owners are investing in help reduce energy costs and save money on the initial capital investment over many years,” he says. “When owners invest in more sophisticated energy controls, they also create a better indoor environment for tenants, and that improved environment makes it easier for these owners to lease up their buildings than the next guy.”

More than just thermostats

Electronic control systems can now monitor everything from heat and air conditioning usage to electricity and water consumption, making buildings more cost-efficient as well as more comfortable than ever before.

Indeed, these systems can do far more than count kilowatts. Shades can be programmed to raise and lower with the sun. Air conditioners can be switched on automatically early in the morning to avoid an expensive spike in electricity use during the day, or programmed to run on a staggered basis to keep demand as consistent as possible. Elevators can be designed to hover around the busiest floors, rather than returning right back to the lobby.

A modern central heating and energy control system can cut energy costs by 5% to 15%, depending on the building, according to Terry Hoffman, director of building automation systems marketing for Milwaukee-based Johnson Controls, the Pentagon's control systems vendor.

High-tech maintenance

Developers are taking more advantage of computer and Web-based information systems. Bill Kosik, managing principal at the Chicago-based mechanical engineering firm EYP Mission Critical Facilities, estimates that information and operating control systems account for 3% to 5% of construction costs on a new building, a far cry from the days when control systems were just a few gauges in the basement.

Web-based programs can generate reminders to inform a technician when it's time to change an air conditioning filter or perform maintenance. These information systems have made maintenance more precise as well. “Instead of just having a guy occasionally look at a piece of equipment, computer programs can actually monitor the run-time hours,” explains Olhava of Hines.

There are even devices available today that monitor the vibrations in a piece of large equipment and predict how long it's going to last, Hoffman says, enabling owners to exercise preventive maintenance on machinery. When something does go wrong, information systems alert the building engineer. These systems are capable of pinpointing the problem, right down to the location of a burnt-out fluorescent tube.

In the old days, when an employee complained about the temperature being too hot or too cold, the technician would have to walk to that part of the building to check out the problem. Today, the technician can adjust the temperature simply by changing the numbers on a computer screen. And because the systems are Web-based, the technician can even do the work from home.

Although the upfront costs are significant — about $75,000 for a 200,000 sq. ft. building — payback on such advanced information systems is generally three to five years, says John Sutton, an operations executive for the Texas Guaranty Student Loan Corp. and president of the Austin, Texas chapter of the Building Owners and Managers Association International.

Follow the LEEDer

Building owners and managers are taking advantage of various programs that provide tips for implementing green technology. Nearly 2,000 buildings representing more than 400 million sq. ft. of offices, schools and supermarkets have qualified for the EPA's Energy Star designation and now use 40% less energy than conventional buildings. EPA officials estimate that owners and tenants save approximately $200 million annually in energy costs while cutting gas emissions by the equivalent of 500,000 cars.

While thousands of buildings already have earned an Energy Star designation, the program continues to win new converts. CarrAmerica, a Washington, D.C.-based REIT that owns and operates 291 office properties across the country, recently started benchmarking its buildings using the Energy Star database.

Richard Greninger, managing director for operations at CarrAmerica, is enthusiastic about the program. By following Energy Star recommendations, his firm hopes to cut the energy consumption of its entire portfolio by 5% over the next 2.5 years.

LEED, a newer and more ambitious set of guidelines promoted by a group called the U.S. Green Building Council, provides a rating system for environmental sustainability. Building designs are awarded points for a wide variety of energy-efficient and environmentally friendly features, from the installation of floor-based heating to reduce energy consumption to the use of local building materials that take less energy to transport.

Kosik says his firm is now “getting more requests to explore LEED, not as a PR opportunity but for what can come out of it in terms of tangible operating costs.” Receiving LEED certification can add about 3% to the cost of a new building, says George Bourassa, an engineer for the national mechanical engineering firm Carter & Burgess.

One reason that Chicago-based EYP may be seeing a lot of interest in LEED projects is that the city of Chicago is a green convert. Mayor Richard Daley may have grown up in the smoke-filled rooms of Chicago politics, but over the past decade he has emerged as one of the biggest champions of green technology nationally. Today, Chicago promotes its own version of the LEED standard. Developers can earn special tax incentives by following guidelines.

Anne Kniffen, managing principal of The Lauck Group, an Austin, Texas-based interior architectural firm whose clients include trendy organic food purveyor Whole Foods, says the company has reduced energy bills by following LEED guidelines. At Whole Foods' new Austin headquarters, an environmentally friendly under-floor cooling system eliminated the need for a dropped ceiling to hide ventilation ducts.

Kniffen's team installed concrete floor panels instead of laying conventional wall-to-wall carpet. LEED guidelines look favorably on the use of concrete because carpeting often ends up in landfills and can reduce internal air quality.

And companies can benefit from more than energy savings. A number of case studies show that employers that move into naturally lit spaces have reported double-digit drops in worker absenteeism and similar increases in productivity, according to research by Seattle City Light, the municipal power authority of the city of Seattle.

For developers, there may be some additional indirect cost benefits to green design. The focus on natural light is taking architects back to footprints not seen since prior to World War II.

In the 1940s, the advent of fluorescent lights and air conditioning made it possible to build deeper rooms without regard for how far sunlight could penetrate a building, Kosik says. Today, concerns about energy efficiency are leading to a decrease in room depths, which results in more natural lighting and less energy consumption.

What's next?

Although energy-efficient technology is catching on, building green isn't second nature yet to real estate owners. One factor slowing the adoption process is the limited knowledge of building engineers. “Back in the old days, you'd think of an operating engineer as a guy with a grease gun,” says Olhava of Hines. “Today, many of them use more sophisticated equipment — laptops and control sequences, and definitely a lot more electronics.”

While the generation that clung to its pneumatic controls has now either retired or learned some new tricks, there are still limits to how much of the new technology engineers understand. “The technology is moving faster than they know how to deal with it,” says Kosik.

Hoffman of Johnson Controls says his firm is trying to encourage Information Technology (IT) departments to team up with building operating engineers to save money in infrastructure costs and take advantage of internal technical expertise.

Companies are implementing Web-based applications to monitor buildings from a central location in order to benchmark their expenditures, according to Hoffman, or by piping the data to an outside firm that can analyze the expenditures and make recommendations about how to create more cost savings.

Fringe benefits of going green

The economic gains for building owners who invest in green technology go beyond the monthly reductions in energy bills. Mark Pomykacz, president of Federal Appraisal & Consulting, says that green buildings reflect attention to detail, which ultimately results in a Class-A product. Or as Olhava says regarding the benefits of investing in energy controls, “The better the system you have, the higher the quality of your building.”

The pricing premium that buyers are willing to pay for some newer buildings is a byproduct of owners' investment in energy-efficient features, says Pomykacz. “It's not simply because these buildings are newer, it's because they're better.”

Bennett Voyles is a New York-based writer

TAGS: Technology
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