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Looking Forward

Green Forecast Remains Strong: Not only has sustainability changed the DNA of the design and construction industry, but its impact endures in spite of the economic downturn.

November 2010

By Harvey Bernstein

As our understanding of sustainability has moved beyond energy and water efficiency, it has shifted the ways the industry defines excellence in construction. In many ways, green now defines the way we live and work. Consider 2009 research from the CB Richard Ellis tenant health and productivity data and other research observations over the past years. Employees in green buildings are demonstrating improved morale, are taking fewer sick days, and are more productive. And, owners and employers are benefiting from reduced healthcare and operating costs, while seeing improved employee retention, talent acquisition, and worker engagement.

Illustration by Katie Edwards
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McGraw-Hill Construction’s (MHC’s) research and analytics data show that the economic downturn has dramatically increased the market share of green building activity by value. In 2005 we found that 2 percent of new commercial buildings were green. That grew to 12 percent in 2008, and we estimate it will be 25 to 30 percent for 2010—nearly a third of the new commercial buildings, much more than we predicted in 2008. These figures represent real project starts as reported in MHC’s Dodge project data. Green buildings are the major winner of the downturn.

There are key factors that may explain this shift in the face of a major recession. First, many of the projects going to start this year were publicly funded, and GSA and other agencies have green building mandates or policies. Second, green projects seem like a better long-term investment as they are the projects more likely to be financed than non-green ones. Most of the larger projects by value that did go to start this year are green buildings. In fact, MHC is seeing an overall trend of green in our largest buildings—LEED was mentioned in 54 percent of all project specs by value in 2009, up from 20 percent in 2006.

Finally, green building is winning in the quality debate. Green Class A office buildings are more appealing to tenants looking for long-term leases. And it’s not just about operating cost savings. It is also about how green buildings today are being equated with higher caliber structures. As well, the perception that green buildings cost more is no longer valid. There are examples of Certified and LEED Silver buildings being built at the same or lower costs than non-green buildings. According to Greg Kats (2009), on average, the added cost of a green building is just 1.5 percent, or $3 to $9 per square foot.

Four years ago, I suggested in GreenSource (November, 2006, p. 30) that green building was heading toward a tipping point. I think it’s clear that in new construction we’ve moved beyond that point.

So, what’s next? I believe the conversation will continue to shift toward green communities and away from the greening of single-buildings—the DNA of our cityscapes and neighborhoods will also morph as more and more members of the industry look around at how their spaces integrate into the whole. The influences on us as human beings will also become more critical—quality of life and the impact on nature are demands the market is just starting to put on the construction industry overall and green building in particular.

Like everything, there may be bumps on the road, but the expertise needed to deliver greener buildings is already firmly established. As with all things, green buildings have evolved, and the very DNA of the industry has shifted with it—and signs indicate that it will never turn back.

This article appeared in the November 2010 print issue of GreenSource Magazine.

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