Green buildings lacking performance measurements and data

The main problem realtor brokers and agents face in trying to convince clients to move into the next generation of green buildings is a lack of data and a comprehensive rating system that can justify the building’s extra costs.
“There is a need to understand how to measure performance,” Brian McCauley, president and chief operating officer of Concert Properties, said last week at Canada Green Building Council’s national conference and Expo in Vancouver.
This would ensure developers are not “over-promoting” and “under-delivering,” he said, while adding the realm of green buildings today is subject to “green wash” marketing. The danger in over-promoting buildings with no available data comes at a later date when it doesn’t meet the buyer’s expectations.
Avison Young’s Michael Farrell, who also spoke on the Green Premium or Brown Discount theme, said brokers also need “a better understanding of what building green” means.
He said brokers also need access to professionals who can help clients understand what they are buying into.
“We need to connect clients with experts who can assist with decision-making on green design costs, implementation and operation,” he said.
McCauley said there is already a wide range of benchmark systems in place for green buildings.
“LEED has done well (in fostering industry change, mainly through government-initiated structures),” he said, but “LEED is not the be-all and end-all.”
Numerous others have instituted green benchmark systems. The University of British Columbia has devised its Residential Environmental Assessment Program (REAP) a comprehensive green building rating system for mandatory application to all residential construction on campus. All new residential buildings at UBC must achieve REAP Gold certification.
Toronto’s Green Standard is a system that sets out performance targets and guidelines relating to site and building design to promote better sustainability. As well, more municipalities are incorporating features of sustainability into requirements for local builders.

VanDusen Botanical Garden applying for certification under the Living Building Challenge
Comparing buildings becomes difficult
“You have to understand the landscape under which the system was imposed,” McCauley said, adding that standards and landscapes are not static.
“We are going to see systems continue to evolve.”
The next wave of green structures are those built under the international Living Building Challenge and passive housing design, he said.
While there are a number of green standards or equivalencies that are being used to construct a green building, there is still market resistance to embrace the technology and pay a premium for owning, renting or leasing a green building.
“In the apartment sector,” McCauley said, “there are few residents who are willing to pay for them.”
It’s an area of concern for Concert Properties, which has directed 75 per cent of its equity towards various forms of income stream properties. As well, buildings that offer recycling, water recovery and other features often require the support of renters or lease tenants so that such green programs are workable.
Educational campaigns may have to be initiated to engage tenants, he said.
The two main groups to recognize the benefit of green buildings, outside of various levels of governments, are businesses that have an image lending itself to green or sustainability technology and professionals such as engineers and architects who have worked on such structures, he said.
Farrell said the industrial sector is at the polar end of the scale and is not adopting designs while tenants are not readily seeking out green structures. The prime reason was a cost concern.
Extra costs a concern
At one point, a municipality in the Lower Mainland attempted to mandate green roofs on warehouses, but the extra cost had developers simply considering alternate sites in other municipalities.
McCauley said the performance issue was more complex than “checking the boxes and getting the
Rather, it attempts to find a reliable system for collecting information on a building once it is functioning and also a means of assessing a structure to ensure the benefits it delivers (whether it is an older retrofitted building, a new structure near transit, or, a commercial structure with geothermal) can be placed into a comprehensive rating system.
“There is no one ratified system that works for tracking performance across all building sectors,” he said.
Terry Cox, Colliers International's managing director, valuation and advisory services, said green building technologies have impacted issues such as maintenance and operating costs.
How valuable is green?
“How do we value a green versus a non-green building?” he asked. Due to its low operating costs and ability to yield higher rents, a green building should have a higher property value, he said.
In the rental and lease areas of commercial and office space, Cox said buildings are coming to the market with more green features to meet increasing expectations.
“A lot of people are demanding it in their workplace,” said Cox. The net result is that developers are being challenged to provide more features, often at higher construction costs, but unsure of how they will reap the benefit downstream.
An Institute of Building Efficiency study found that green buildings had an increased value of 2-17%, increased rental rates of 5.8-35%, higher occupancy rates of 0.9-18%, higher net operations income of 5.9%, and lower capital cost rates of 50-55 basis points.
Developers must also determine which green features are most desirable.
“It is about keeping ahead of the trends,” said McCauley, adding his company began looking at sustainability features in structures as early as 2005.
“We went after the low-hanging fruit,” he said of providing the likes of bicycle-friendly facilities.
The future challenge for landlords is to determine which features will be in future demand.
“We are looking at the long-term trends of assets,” McCauley said. “It is important to know where trends are going and what is important to the tenant.”
“We are still in the early days,” Cox said.
“It is about education. Green was a word that 10 years was used in a different world than today.”

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