1. Green Building Study
ver. 2.0

2. PresentersModerato
r Charles C. Tu, Ph.D.
Mulvihill Professor of
Commercial Real Estate
Burnham-Moores Center
for Real Estate
University of San Diego
Harvey M. Bernstein,
F.ASCE, LEED®
AP®
Vice President,
Global Thought Leadership
& Business Development
McGraw-Hill Construction
David L. Pogue,
LEED®
AP®
National Director,
Sustainability
CB Richard Ellis, Inc.

3. The Study
David L. Pogue, LEED AP
CB Richard Ellis

4. Evidence Is Stacking Up David L. Pogue
Doing Well By Doing Good? Green Office Buildings
Eicholtz, Kok and Quigley; Greening of Corporate
America SmartMarket Report McGraw-Hill Construction;
Do Green Buildings Make Dollars and Sense?
CB Richard Ellis/Burnham-Moores Center for Real Estate
(University of San Diego); Pricing Sustainability Fuerst,
Franz and Patrick McAllister; Does Green Pay Off? Miller,
Spivey and Florance; Green Design and the Market for
Commercial Office Space Wiley, Benefield and Johnson;
Urban Green Council Study prepared for the UGC by
Davis Langdon; Why Do Companies Rent Green?
Eicholtz, Piet, Kok and Quigley; Socially Responsible
Property Investment Ellison, Sayce and Smith;
Estimates of Improved Productivity and Health
from Better Indoor Environments Fisk and Rosenfeld
Reduced long-term
costs, improved
health benefits and
higher productivity
Results
4

5. Survey LocationsData Points: David L. Pogue
Seattle
Bay Area
So. California
Houston
Washington, DC
Boston
Chicago
Dallas
Denver
Development
USD (2009-10)
McGraw-Hill (2010)
Survey Set
CBRE-managed
office space
156 Buildings
Nationwide
588 Tenants
of 2,500 surveyed
52,506,624 SF
Rentable Space
Avg. 88
ENERGY STAR
5

6. 2010 Findings David L. Pogue
Tenants in green
buildings claim
higher productivity
levels and fewer
sick days
Separate metering
impacts energy
savings
Rental rates higher
and occupancy
equal to/better than
overall market
2009:
6

7. Powerful Forces David L. Pogue
Attitudes +
Business Practices
have pushed the green
building movement forward
“We must prioritize
greening our cities,
and cost is not the
barrier some have
made it out to be.”
Urban Green
Council Study
(2009)
Insight:
7

8. Attitudes & Behavior
Perceptions of Green Space by Tenants and Occupants
in a Large CBRE Managed Real Estate Portfolio
Charles Tu, Ph.D.
University of San Diego

9. Type of Business
Financial and Legal
Services comprised
33% of sample
Top 10 industries
represent 82% of
the total sample
4%4%4%
5%
7%
8%
9% 9%
17%
16%
0%
5%
10%
15%
20%
FinancialSrvcsLegalSrvcsRealEstate
InsuranceCom
puter/ITHealthcareConsultingNon-Profit
EnergyEngineering
Reveal: Charles Tu, Ph.D.
1/3 of all businesses
9

10. Publicly
Traded, 25%
Privately Held,
68%
Non-Profit, 7%
Majority of
respondents are
private firms
Breakdown of 2010
and 2009 samples
are very similar
Reveal: Charles Tu, Ph.D.Type of Organization
10

11. Number of Employees
100+, 12%
11-25, 20%
26-100, 25%
1-5, 24%
6-10, 19%
Survey sample is
evenly distributed
in terms of
company size
Reveal: Charles Tu, Ph.D.
11

12. LEED®
Certification
No, 38%
Underway,
10%
Yes, 52%
Reveal: Charles Tu, Ph.D.
At time of survey:
• Approx. 1/2 of
respondents in
LEED buildings
• 10% undergoing
LEED certification
process
12

13. Staff Dedicated to Green
No, 62%
Yes, 38%
Reveal: Charles Tu, Ph.D.
38% of survey
sample have staff
dedicated to
environmental
and/or sustainable
issues
13

14. Firms with a Green Team
No, 71%
Yes, 29%
Reveal: Charles Tu, Ph.D.
29% of survey
sample organize
a Green Team to
implement
sustainable office
practices
14

15. Formal Written Policy
No, 68%
Yes, 32%
Reveal: Charles Tu, Ph.D.
Approx. 1/3 of
respondents have a
formal written policy
on sustainable goals
that is shared with
employees
15

16. Policy Shared with Clients
No, 27%
Yes, 73%
Reveal: Charles Tu, Ph.D.
About 3/4 of those
with a written policy
also share it with
clients
Overall, more
than 1/2 of survey
respondents have
implemented
sustainable
practices
16

17. LEED vs. Non-LEEDReveal: Charles Tu, Ph.D.
More respondents
in LEED buildings
have implemented
sustainable
practices, however…
Difference is not
statistically
significant
34%
26%
30%
34%
32%
39%
0%
10%
20%
30%
40%
50%
Dedicated Staff Green Team Written Policy
Non-LEED
LEED
17

18. Type of Organization
59%
28%
18%
21%
39%
33%
29%
59%
55%
0%
10%
20%
30%
40%
50%
60%
70%
Dedicated Staff Green Team Written Policy
Publicly Traded
Privately Held
Non-Profit
Reveal: Charles Tu, Ph.D.
Significant
difference across
type of organization
in terms of
sustainable
practices
Nearly 80% of
publicly traded
firms have
implemented
sustainable
practices
18

19. Size of Firm
45% 45%44%
24%
34%
21%
25%
33%
26%
39%
25%
36%
41%
36%
0%
10%
20%
30%
40%
50%
Dedicated Staff Green Team Written Policy
1-5
6-10
11-25
26-100
100+
Reveal: Charles Tu, Ph.D.
The firm’s size has
a significant impact
on implementing
certain sustainable
practices
19

20. Importance of Factors Charles Tu, Ph.D.
3.58
3.74
3.77
3.86
4.19
4.51
3.71
3.46
2.64
3.64
0 1 2 3 4 5
Preferred parking for hybrid vehicles
Green cleaning practices & products
Practices & fixtures to conserve water
Management's commitment to sustainability
Access to alternative transportation
Practices & fixtures to conserve energy
Lighting controls to conserve electricity
Recycling program
Daylight & view in the office
Healthy indoor environment
Reveal:
Survey respondents
consider green
features important
when selecting
office space
On a scale of 1-5,
average rating
is 3.71
Healthy indoor
environment is
the No. 1 factor
20

21. LEED Status
3.67
3.763.71 3.65
2.5
3
3.5
4
4.5
5
Overall No Underway Yes
Reveal: Charles Tu, Ph.D.
Attitudes toward
green features not
affected by LEED
status of building
21

22. Type of Organization
3.64
3.86
3.71
3.81
2.5
3
3.5
4
4.5
5
Overall Publicly Traded Privately Held Non-Profit
Reveal: Charles Tu, Ph.D.
Attitude is
significantly
influenced by type of
organization
Non-profit and
public firms
consider green
features more
important
22

23. Firm Size
3.92
3.743.65
3.753.71
3.59
2.5
3
3.5
4
4.5
5
Overall 1-5 6-10 11-25 26-100 100+
Reveal: Charles Tu, Ph.D.
Firm size also has
quite significant
effect on the attitude
23

24. Current Employees
Strongly
Agree, 15%
Strongly
Disagree, 2%
Disagree, 2%
Neutral, 33%
Agree, 46%
Over 60% agree
that green office
space is important
for current
employees
Reveal: Charles Tu, Ph.D.
24

25. Recruiting Employees
Strongly
Disagree, 3%
Strongly
Agree, 8%
Disagree, 11%
Neutral, 52%
Agree, 26%
34% agree that
green office space
is important to
recruiting
Reveal: Charles Tu, Ph.D.
25

26. Clients and Customers
Strongly
Disagree, 2%
Strongly
Agree, 19%
Disagree, 5%
Neutral, 34%
Agree, 40%
60% agree that
green space creates
a favorable
impression on firm’s
clients and
customers
Reveal: Charles Tu, Ph.D.
26

27. Public Image
Neutral, 31%
Strongly
Disagree, 2%
Disagree, 3%
Strongly
Agree, 20%
Agree, 42%
Majority of
respondents agree
that green space
creates a positive
public image for
firm’s owners or
shareholders
Reveal: Charles Tu, Ph.D.
27

28. LEED vs. Non-LEED
Respondents in
LEED buildings:
green space
important for current
employees and
public image
Respondents in non-
LEED buildings:
green space more
important for clients
and customers
In all aspects,
respondents in
LEED buildings felt
more strongly
Reveal: Charles Tu, Ph.D.
3.65
3.23
3.68
3.64
3.71
3.753.77
3.25
2.90
3.00
3.10
3.20
3.30
3.40
3.50
3.60
3.70
3.80
3.90
Current Employees Prospective
Employees
Clients & Customers Public Image
Non-LEED
LEED
28

29. Type of Organization
Publicly traded:
green space
important, especially
for public image
Non-profit:
green space more
important for
employees
Sweet Spot:
Larger publically
traded firm in a
LEED building
Reveal: Charles Tu, Ph.D.
3.913.81
3.65
3.973.92
3.39
3.60 3.593.60
3.17
3.55
3.23
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
Current Employees Prospective
Employees
Clients & Customers Public Image
Publicly Traded
Privately Held
Non-Profit
29

30. Size of Firm
3.38
3.59 3.45
3.59
3.14
3.56
3.72
3.66
3.54
3.59
3.69
3.24
3.68
3.72
3.82
3.33
3.72
3.89
3.78
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
Current Employees Prospective
Employees
Clients & Customers Public Image
1-5
6-10
11-25
26-100
100+
Larger firms:
green space more
important
Reveal: Charles Tu, Ph.D.
30

31. on the bottom line…
Average OccupancyReveal:
Survey
Set
Non
LEED Market
85.07% 86.17%
82.27%
84.04%
LEED
Survey
Set
Non
LEED
LEED
3.4% 4.74%
2.15%
Green buildings
demonstrate higher
occupancy levels
than the general
market
Higher Occupancy (Q1-3)
David L. Pogue
Market
31

32. on the bottom line…
Average Rental RatesReveal:
Survey
Set
Non LEED
LEED
– 4.81%
Green buildings
demonstrate higher
rental rates than the
general market
Higher Rental Rates on Average (Q1-3)
David L. Pogue
Survey
Set
Non
LEED Market
$27.62
$25.91 $27.22
$29.23
LEED
7.38%
1.46%
Market
32

33. Business Practices
Key Factors Driving Green Growth for Owners, Building
Managers & Occupants
Harvey Bernstein
F.ASCE, LEED AP
McGraw-Hill Construction

34. Harvey Bernstein
Objective:
Understand Business and Human Factor Benefits
as a Key Driver to Green
Agenda
Owners Involved in LEED Commercial Buildings
Building Manager Perspectives on LEED Commercial Buildings
Occupants Experiences Working in Green Office Buildings
Green Building Trends
34

35. Owners Involved in
LEED Commercial
Buildings

36. Harvey BernsteinCommercial Building Owners Expect
Increased Green Building Activity in 3 Years
23%
8%
15%
31%
23%
15%
8%
15%
31% 31%
2010 2013
More than 90%
of buildings
61% -90% of
buildings
31% -60% of
buildings
16% -30% of
buildings
1% -15% of
buildings
46% expect to do
green at higher
levels than in
2010
39%
36

37. Harvey Bernstein
8%
33%
83%
100%
LEED - Other Certification
LEED-NC Certified
EnergyStar Labeled
LEED-EBO&M Certified
All Owners Expect to Pursue LEED
Certification on Other Existing Buildings
37

38. Harvey Bernstein
39%
62%
73%
79%
93%
Increased tax incentives
Greater productivity of building occupants
Increased building value/asset value
Higher tenant/customer retention and
renewal
Increased building Return on Investment
(ROI)
Attracting new tenants
Decreased operating costs
35%
36%
64%
64%
79%
93%
71%
2010 Commercial
Building Owners
(CBRE/MHC/USD)
2009 Corporate
America executives
(MHC/Siemens)
Owners Expected Benefits from
Green Buildings
38
Decreased Operating Costs
Greater Productivity of
Building Occupants
Higher Tenant/Customer
Retention and Renewal
Increased Building/Asset Value
Increased Tax Incentives
Attracting New Tenants
Increased Building Return on
Investment (ROI)

39. Harvey Bernstein
90%
48%
62%
66%
59%
43%
36%
7% 7%
14%
No
86%
Yes
14%
No
57%
Yes
43%
Corporate
America
(2009)
Worker
Productivity
Health Care
Claims
Customer
Loyalty
Retention/
Turnover
Benefits Tracked
Owners
(2010)
Customer Related Staff Related
2010 Commercial Building
Owners (CBRE/MHC/USD)
Corporate America
executives in 2009
(MHC/Siemens)
Benefits Being Tracked by Owners
39

40. Harvey Bernstein
Neutral
14%
Disagree
7%
Agree
43%
Strongly
Agree
36%
79%
Owners Believe Green Can Be Achieved
Affordably with Low-Cost Features
40

41. Harvey Bernstein
50%
65%
72%
79%
Overall increase in energy
prices
Overall savings in operating
expenses
Competitive advantage from
offering 'green' features
Reduction in energy needs for
the building
 Government
not seen as
a big driver
Triggers to Investment in Green
Owners Driven Most by Holistic
Business Benefits
41

42. Harvey Bernstein
 More than half
do not see ANY
major obstacle
to doing green
building
Obstacles to Investment in Green
Top Owners List of Challenges
14%
14%
28%
28%
43%
Lack of green
products and
services
Difficulty
maintaining green
features
Difficulty in
measuring ROI
and benefits
Tenant
unwillingness to
pay
High intial
investment
42

43. Harvey Bernstein
 Decreased Operating Costs: 8.5%8.5%
 Increased Building Values: 6.8%6.8%
 Improvement in ROI: 19.2%19.2%
 Increased Occupancy: 2.5%2.5%
 Rent Rise 1.0%1.0%
20092009
8.0%8.0%
4.8%4.8%
4.1%4.1%
5.3%5.3%
1.0%1.0%
20102010
Source: 2009 results—Green Retrofit & Renovation SmartMarket Report, McGraw-Hill
Construction, 2009; 2010 results—MHC/CBRE, 2010
Note: Surveys include similar populations of commercial building owners.
MHC 2009 Green
Retrofit SMR
Lower ROI
expected in
2010 vs. 2009
study
 2009: Some
Class B
upgrades to
Class A
 2010: Class A
only
14% of tenants
firms would
pay 2%–3%
more for green
2010 CBRE/MHC/
USD survey
Business Benefits Expected Across the
Industry by Business Owners
43

44. Harvey Bernstein
 Owners consistently report increases in ROI, occupancy and
rent premiums from green building
 Owners are motivated by profit measures—not just
operational cost savings
 Tools that help owners measure and benchmark business and
human benefits would be extremely valuable and marketable
 An Owner who invests in green building is committed to doing
so in the future—so target LEED/green building owners for
products and services
What Have We Learned from the
Owner Data?
44

45. Building Manager
Perspectives on
LEED Commercial
Buildings

46. Harvey Bernstein
15%
37%
37%
26%
35%
59%
87%9%
13%
2%Public Pressure
Tenant Demand
LEED-EB
Consultant
Management
Company (e.g.,
CBRE)
Building Owner
Influential
Very
Influential
Agents Influencing Building Manager
Green Decisions
96%
50%
17%
72%
85%
46

47. Harvey Bernstein
81%
89%
89%
94%
Competitive
advantage from
offering 'green'
features
Reduction in
energy needs
for the building
Overall increase
in energy prices
Overall savings
in operating
expenses
 Government
not seen as
a big driver
Triggers to Investment in Green
65%
OWNERSOWNERS
72%
79%
50%
Building Manager Driven by Cost Savings
47

48. Harvey Bernstein
3% 3%
16%
28%
3%
53% 94%
Very
Satisfied
Somewhat
Satisfied
Neutral
Somewhat
Unsatified
Before
Green Upgrade Current Satisfaction Level
2%
7%
91%
After
Green Upgrade
Building Managers See Higher Tenant
Satisfaction After Green Upgrades
48

49. Harvey Bernstein
53%
47%
63%
59%
22%
28%
19%
25%
31%53%
Energy-Efficient Equipment
Indoor Air Quality Practices
Energy-Efficient Lighting
Green Cleaning Products
High Efficiency Plumbing
Fixtures
Moderate
Impact
Great
Impact
Building Managers Observe Many Green
Features Impacting Tenant Satisfaction
Products &
Practices
84%
84%
82%
75%
75%
49

50. Harvey Bernstein
15%
17%
39%
41%
76%
Energy Water
7%
17%
67%
91%
Low-E
Window Films
White/Cool
Roof
Replaced Hinged
Door with
Revolving One
Added
Insulation
Individual
Temperature
Controls
Low-Flow
Toilet
Motion-
Sensitive
Faucets
Waterless
Urinals
Recycled
Rain/Waste
Water for Toilet
Flushing
Green Products Installed by
Building Managers
Products &
Practices
50

51. Harvey BernsteinBuilding Managers Are Including Green
O&M Practices in at Least 94% of Buildings
Products &
Practices
51

52. Harvey Bernstein
 Building managers are most concerned with cost savings
 Emphasizing energy, water and operational cost savings is
extremely critical
 Building managers are focused on selecting and installing green
building products and services
 Particularly for products that improve water and energy efficiency
and indoor environmental quality
 More than 1/3 of building managers have installed renewable
energy into LEED buildings
 LEED is encouraging its use
 Tracking green building performance could help encourage higher
levels of investment in green building
What Have We Learned from the
Building Managers Data
52

53. Occupant
Experiences Working
in Green Buildings

54. Harvey Bernstein
4%
71%
16%9%
More Productive
No Change
Less Productive
Don't Know
In comparison,
10% of tenant firms
expect increase in
productivity
16% of Building Occupants Observe
Productivity Increases
54

55. Harvey Bernstein
15%
36%
39%
15%
Very
Satisfied
Somewhat
Satisfied
Neutral
Somewhat
Unsatified
Current Satisfaction Level
18%
49%
26%
7%
After
Green Upgrade
75% are
Satisfied
54% are
Satisfied
Preliminary Findings Suggest Building
Occupants Have High Satisfaction Rates
55

56. Harvey Bernstein
35%
40%
44%
40%
62%
47%
52%
53%
57%
60%
73%
42%
Energy-Efficient Practices and
Products
Comfortable Indoor
Temperature
Energy Conserving Lighting
Controls
Healthy Indoor Air Quality
Access to Public
Transportation
Daylight and Views
LEED
Certified
Non-LEED
(Energy Star
only)
Building Occupants of LEED Buildings
More Satisfied with Green Features
56

57. Harvey Bernstein
Case Study:
McGraw-Hill Higher Education
Dubuque, Iowa; LEED Silver
 93% more satisfied after move to
green building
 61% more productive
 55% producing higher quality work
 12% healthier, fewer sick days
 74% think LEED certification is
important
 Most value the day lighting
 Improved level of employee
engagement in corporate activities –
84% now engaged versus 73%
57

58. Harvey Bernstein
 People who work in buildings care about things that affect their health
 If employers capitalize on this, they can gain large business savings
 Product and service providers that can prove benefits in this area
can increase market share
 People are satisfied by things they notice
 Managers and owners should communicate and engage people
working in their buildings to point out and capitalize on green
efforts
 People working in Class A LEED buildings are more satisfied with
green products as compared to those in non-LEED buildings
 Those working in the certification industry should take note
What Have We Learned from the
Building Occupants?
58

59. Green Construction
Trends

60. Harvey Bernstein
2005 2008 2010 20152005 2008 2010 2015
= Nonresidential
Market
$182
billion
$3 billion
2% of
market
$54
billion
35% of
market
$239
billion
= Green Market
$154
billion $302
billion
$145
billion
48% of
market
$29 billion
12% of
market
Source: Green Market Size: 2011 Green Outlook Report, McGraw-Hill Construction; base value of construction market from
McGraw-Hill Construction Market Forecasting Service, as of September, 2010
2015 Offers Significant Opportunity for
Green Building in New Non-Residential
60

61. Harvey Bernstein
0
5
10
15
20
25
30
2008 2010
$billions
Office
Green Share
$27
billion
30% of
market
$15
billion
$8
billion
$8
billion
50% of
market
*
New Office Construction
Retrofit/ Renovation
Nonresidential
53% of
market
New Office Construction Remains Strong
Green Market Despite Overall Downturn
Source: Green Market Size: 2011 Green Outlook Report, McGraw-Hill Construction; base value of construction market from
McGraw-Hill Construction Market Forecasting Service, as of September, 2010 61

62. Harvey Bernstein
 The green building market – both new and
retrofit –is growing dramatically: 35% of new
construction in 2010
 Tangible business benefit – such as ROI,
occupancy and rent increases – from green
are reported – and consistent over time
 Green building occupants are reporting
higher productivity and health benefits
 LEED is recognized in the market
 Benchmarking measurement is a challenge,
but recognized as critical to show real value
 Energy efficiency in buildings is good business
Conclusions: Trends Are Emerging in
Research Studies
62

63. Harvey Bernstein
Harvey M. Bernstein
F.ASCE, LEED AP
202.383.2228
harvey_bernstein@
mcgraw-hill.com
David L. Pogue
LEED AP
808.453.7444
dave.pogue@cbre.com
Charles C. Tu
Professor of Real Estate
619.260.5942
tuc@sandiego.edu