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5 Ways You Can Achieve ROI With Green Buildings

Welcome to the third article in our series of five blog posts that LB&B Associates Inc. will present to help COOs and Facilities Managers focus on their core business and not be plagued with facility issues that hamper the work environment or the staff and customer experience.

LB&B has helped commercial clients across the country such as Alpha Natural Resources, Contura Energy, One Alpha LLC, Art Centers, Churches, Southwest Virginia Higher Education Center, Washington Metropolitan Area Transit Authority, and others achieve their facility management goals.

Going Green: Five Big Benefits

Green buildings are good for the environment of course. But they’re also good for your business. They improve the health and comfort of your employees and customers. They increase real estate and rental values, and, believe it or not, they can cost less to maintain than traditional buildings. This is true of retrofits as well as new construction. It’s also good for the US economy.

According to the article “Benefits of Green Building” from USGBC, “by 2018, green construction will directly contribute 1.1 million jobs and $75.6 billion in wages by 2018 in the United States. The industry’s direct contribution to U.S. Gross Domestic Product (GDP) is also expected to reach $303.5 billion from 2015-2018. LEED building construction projects are estimated contribute 386,000 jobs and $26.2 billion in wages by 2018.”

Let’s take a deeper look at how you can benefit from investing in a green facility.

1. Green Cuts Costs Through Energy Efficiency

A solid strategy for using natural resources efficiently is essential with green construction initiatives.

Water and electricity spending is a significant part of operating costs and tends to increase each year. Investing in energy and water efficient equipment and practices pays off.

It is the cheapest and easiest way to save money in the long run. A report from the Pacific Northwest National Laboratory (PNNL) entitled “Re-Assessing Green Building Performance: A Post Occupancy Evaluation of 22 GSA Buildings” indicates that within the United States, green buildings consume 25% less energy and 11% less water than other buildings that are not compliant with LEED standards. These are some green technologies that deliver most return on your investment.

LED Lighting throughout the facility drastically decreases energy costs, providing instant savings for your bottom line. LED lighting also last much longer, further reducing maintenance costs.
Motion Sensors for lighting is practical automation technology that directly impacts your energy costs. Why pay for energy that isn’t being used? By implementing a motion sensor system that is set up and optimized properly, expect to receive substantial savings.
High-Efficiency HVAC systems provide direct savings to energy costs. Energy Star, an organization that rates and certifies how energy efficient devices are for the home and enterprise, said that “Most organizations can achieve annual energy savings of 2-10 percent through better energy management. Many ENERGY STAR partners have saved much more, including a school district that reduced its entire energy budget by 60 percent!” HVAC systems are continuously improving and are always becoming more efficient. If LEED is within the scope of your initiatives, high-efficiency HVAC systems should make the top of the list of investments for your project.
Optimized Air Handling Unit (AHU) Sequencing is also a critical step in improving the operation and efficiency of your HVAC system. If your AHU us not properly set up, it can cost you money in unnecessary energy costs and `long-term maintenance costs. It should be set up to ensure that the system is optimized for spaces that are vacant and for spaces that are occupied. Be sure that your HVAC contractor has a plan to implement a fully optimized AHU sequence that is right for each of the spaces in your building to ensure that you get the best “bang-for-your-buck.”
Weatherproofing all doors and windows is critical. Even though this step is predominantly for retrofits, with new construction it is important that the weather stripping for windows and doors is properly spec’d and installed evenly. Ensuring that the weather seals are properly maintained over the years saves drastically on energy costs. Door closers that are adjusted and functioning properly also contribute to stellar weatherproofing of a building.
Solar panels bring energy costs down. Supplement the energy pulled from the grid with efficient solar panel technology that will help with LEED initiatives and bring energy costs down right away.
Energy analysis software systems provide data and reporting that enable the operator to ensure the entire system is fine-tuned and working together as expected and designed.
Use reclaimed water to support sustainable landscaping.

2. Improve the Environment with Low Emission Systems

Minimizing emissions is vital for the environment and can cut costs. By how much? The PNNL report provides some impressive statistics. Buildings produce 40% of CO2 emission in the United States, generating more than the industrial and transportation sectors! By focusing on efficient systems including maintenance systems that produce low emissions, there are cost savings attached. Green buildings following LEED standards produce 34% less CO2, keeping the air clean and cutting costs.

3. Reduce Maintenance Costs

A competitive differentiator in the green construction space is connected to extra maintenance costs. Maintenance costs can be cut by 20% on new construction!

4. Green Properties have Higher Real Estate Value

Investing in green technologies and construction methods increases the long-term value of both new construction and retrofits. In a recent McGraw-Hill Construction SmartMarket Research Study entitled “WORLD GREEN BUILDING TRENDS: Business Benefits Driving New and Retrofit Market Opportunities In Over 60 Countries”, it reports that the value for new green buildings increases by 10.9% and for retrofit projects, value increases by 6.8%.

5. Increase Rental Rates

Tenants are drawn to green properties. They see value in the impact green technologies have on their worker’s productivity, health, and morale. According to a report from USGBC entitled “The Business Case for Green Building,” it references a CBRE report that studied the San Diego commercial building rental market and it was found that green buildings maintain a vacancy rate that is 4% lower than non-green buildings within the same market. Additionally, if the building was LEED certified, it demanded the highest rent.

Conclusion – What is the ROI for Green Buildings?

Going green – whether you’re targeting LEED certification or not – will require some additional upfront costs versus traditional equipment and building. There is no getting around that! Green materials and technologies cost more. However, what is the ROI that one can expect by building green and by receiving LEED certification?

The results are positive! According to USGBC, green building owners report a return on investment for existing buildings of 19.2% and 9.9% for new buildings. One major software company that received LEED Platinum awards stated that they experienced a net present value return of nearly 20 to one of its initial investment. Another large firm reported that they achieved a full return on their investment in under 8 years.

If you have – or want – to maintain your building using best practices for green buildings, we can help.

To learn more about ways to keep your facility healthy and productive, as well as how to save facilities and operating budgets, visit parts one and two of this series.

To learn more about green buildings and their benefits, visit us on the web!