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Go green. Go green. Go green. Everywhere you turn nowadays, the public is being encouraged to go green - be earth friendly, save energy, save the planet, preserve our environment.
There’s no question that green commercial buildings are grabbing their share of headlines these days. Major corporations such as Toyota, Goldman Sachs, and Hearst Corp. have built and moved into environmentally responsible buildings.
According to a recent report in Commercial Investment Real Estate Journal, national commercial real estate companies, such as Liberty Property Trust, Hines, and Transwestern, are developing and managing sustainable properties. The article noted that a 40-story green office tower in Chicago, built for $200 million in 2005, was sold for $350 million, or $422 per square foot in 2006, setting a market sales record.
These are just a few examples of the green movement’s impact on the commercial real estate industry. “The market is incredible for green commercial,” Jerry Yudelson, principal at Yudelson Associates, a green building consulting firm in Tucson, Ariz., told the journal. “The sea change in attitude in the development community in the last 18 months is just breathtaking.”
Consider that key No. 1.
The value of green building construction starts was expected to exceed $12 billion in 2007, according to the U.S. Green Building Council, citing McGraw-Hill Construction Analytics. Since launching its Leadership in Energy and Environmental Design (LEED) building rating system in 2000, USGBC has registered almost 8,000 projects and certified nearly 1,000 buildings, encompassing more than 1 million square feet.
At the same time, more than 38,000 professionals in the commercial building industry have become LEED-certified, the USGBC reports. As noted in the Commercial Investment Real Estate Journal, the push toward green isn’t just in major markets with big-name developers who are certifying their projects.
Commercial real estate professionals in smaller markets, on smaller scales and budgets, also are developing environmentally friendly properties for all the same reasons as the headline-grabbers: energy savings, healthier indoor environments, and smaller carbon footprints.
Call this key No. 2.
Put No. 1 and No. 2 together, and it’s easy to understand why the smarter HVACR contractors are joining the green brigade. There really is money to be made in going green.
“It is difficult to quantify and the green revolution is still new,” agreed David Kruse, president of L.J. Kruse Co., Berkeley, Calif., who quickly added, “but we believe the movement will fundamentally change the way we all do business.
“The metrics that are just now beginning to emerge on green buildings are very interesting. Ongoing operating costs are 20 to 30 percent less. Rents are calculated at 15 to 40 percent more than market, and I think this is the key: asset values are exceeding comps by as much as 50 percent.”
In other words, if building owners are making money by going green, you can bet the movement will continue.
KRUSE-ING ALONGThe NEWS was able locate more than a few HVACR contractors who were not afraid to admit they are making money by turning their operations - if not fully, then certainly a fair share - to the green market. Kruse, for one, said his company - a 90-year-old-plus plumbing, heating, and cooling contractor serving the East Bay - “is totally committed” to the green building movement.
“We have integrated sustainability within our company culture and philosophy,” said Kruse, who is a LEED-accredited professional, along with his brother, Andy, who is also executive vice president of the firm. “As owners, we have set the standards and goals for our team.”
Kruse does not hide his passion. As the current president of the Mechanical Contractors Association of America (MCAA), he has been preaching green to the membership.
“I have been concentrating on our MCAA green initiative,” he said, refusing to turn back. “I believe green building to be an irreversible movement driven by social, economic, and environmental forces.”
Last year, Kruse was instrumental in MCAA hosting a three-day green conference in Milwaukee, establishing prep classes for those seeking to be a LEED AP (accredited professional), and managed to get the association to form a “green alliance” with the UA.
“Absolutely,” Kruse responded when asked if going green is an important marketing initiative.
The large design-build contractor has done a number of green projects. Current projects registered with the USGBC include the Richmond (Calif.) Civic Center, Lawrence Berkeley Laboratory, Advance Light Source Support Building (in Berkeley), and 1950 Franklin Street (Oakland, Calif.).
“In addition, our service department is doing smaller green projects every single day of the week,” said Kruse.
Being experienced in design-build was, as he put it, “critical in the procurement of these projects.”
“It helps that we have three LEED AP on staff,” said Kruse. “Of course, the relationships we have developed over the years with our clients and owners is of critical importance, but I believe the green building to be so imminently important that if we, as contractors, are not informed and educated on these issues, someone else will be doing the work.
“On the day-to-day service projects, our marketing has been focused on green and sustainable services, and this has brought about a great deal of interest in our community, both on the residential and commercial sides.”
The president is not only talking the talk, but also walking the walk. The firm is in the midst of doing a major renovation to its 20,000-square-foot facility in Berkeley. The project is registered with the USGBC and L.J. Kruse plans to achieve LEED CI platinum certification.
“Andy and I are incredibly excited about this project, which we plan to use as a marketing and educational tool,” said Kruse. “We are installing PV solar system to essentially go off the electrical grid. This system - after all city, state, and federal rebates - will pay for itself in seven years or less.”
Other systems to be incorporated into the building include solar water heating, rainwater harvesting, water use reduction, innovative wastewater technologies, storm water management, more-efficient HVAC equipment, zoning, and controls.
THE MCKINSTRY WAYLike L.J. Kruse, McKinstry, one of the leading mechanical construction and engineering firms in the Pacific Northwest, has focused in on green and may never turn back. Well … make that will never turn back.
“Having a green marketing initiative isn’t just important to contractors. It’s imperative,” said Matt Gregg, project manager for McKinstry. “We have engaged a marketing agency to better position our existing services. We are also in the process of a brand refresh with a green or sustainable emphasis.”
Since the beginning of the green building movement, “it seems as if most mechanical contractors have allowed others to lead the way, ” said Gregg, referring to architects, consultants, and general contractors. “What most people forget is the mechanical team controls much of the building’s energy efficiency. We are focused on letting people know that we not only can lead the way, but that we should lead the way.”
Gregg does not hide the fact that the firm, headquartered in Seattle, is positioning its existing services in a way that highlights the green components.
“Secondly, we are also changing our message,” he said. “While we used to focus on energy efficiency, we are now focusing on carbon footprint and climate change.”
Most of McKinstry’s current work is going for LEED certification or has some green aspect. Gregg noted that the company, which offers a broad range of construction, design, and facility services, has worked on 10 LEED-certified projects and the team is currently working on a dozen others that are LEED registered. These include notable jobs like Seattle’s Alley 24 (LEED-CS), Seattle’s Central Library (LEED-NC), and the Department of Ecology (LEED-EB).
“The majority of the design-build work we do is negotiated,” said Gregg. “Much of this work is with legacy clients who we have done work with before. This may include design-build experience, energy retrofits, service, or facility management work.”
McKinstry is not necessarily using any new technologies, per se. Gregg said the contracting business is just applying existing technologies in new ways.
“This includes things like expanding existing energy spreadsheets to look at carbon,” said Gregg. “It also includes things like expanding life-cycle costing to include LEED items or carbon as an output.”
No denying the advancement into green “has absolutely helped us win new business,” he added.
“Primarily, it has helped us expand our energy services group. Additionally, it has allowed us to branch out and work on jobs like a biodiesel plant and a recycling facility.”
If an HVACR contractor seeks to go green, Gregg supplied the following five tips:
1. Educate your employees on the importance of sustainability. “Provide training for those who need it,” said Gregg.
2. Create a “green team” or designate a “green champion” to take ownership of all things green.
3. Make sure all green information and tools are managed in such a way that “they are readily available to everyone in the company.”
4. Try to incorporate green goals into all of your project work.
5. Educate your clients about how your existing services can promote green construction.
ANOTHER CALIFORNIA EXAMPLEAnother example of a contracting firm doing quite well in the green market is Southland Industries. According to Senior Vice President of Engineering, Peter Pobjoy, P.E., the Irvine, Calif.-based firm has responded to the growing green building market through the following initiatives:
• Keeping current and increasing its knowledge and understanding of new technologies offering reduced energy consumption and improved performance.
• Collaborating with owners and architects to provide a fully integrated solution, based on its design-build expertise.
• Attending meetings and seminars held by prominent organizations to expand its knowledge and network with leading industry players.
• Training its in-house staff and growing a culture of sustainability within the company.
“For us, designing a green project involves aspects of proven technologies, along with the appropriate application of new technologies,” said Pobjoy.
“In one of our recent significant projects, we borrowed from a system that was popular in the 1960s, and by modifying it with high-efficiency components available today, we were able to develop a prototype in the lab in collaboration with a large manufacturer, prove the equipment performance, and mass produce it for the project.”
Technologies Southland Industries is evaluating and using for HVAC systems include under-floor air, displacement ventilation, chilled beams, heat reclaim chillers, and energy/heat recovery. From the plumbing side, it is examining low- or zero-flow fixtures, water management, and recovery systems.
“We also use installation methods and materials in construction which have reduced impact on the environment,” stressed Pobjoy.
Some of the notable green projects for Southland Industries include a central energy plant for the University of Hawaii’s John A. Burns School of Medicine campus in Honolulu, plus the U.S. Census Bureau headquarters at the Suitland Federal Center in Maryland.
In the first project, the new energy plant consists of a central chilled-water cooling system with highly efficient, variable-speed chillers that are cooled using seawater from nearby wells, eliminating the need for cooling towers. According to Pobjoy, the seawater increased the plant efficiency and eliminated the need for domestic water makeup and chemical treatment typically required for water-cooled chillers with cooling towers.
At the U.S. Census Bureau headquarters, the firm installed an underfloor air HVAC system over the 1.4 million square feet of office building space. The building is registered as LEED silver.
“Most of our projects are procured through a design-build competition process, where each bidder is required to provide a value-based proposal meeting a minimum performance criteria and a fixed budget provided at the proposal stage,” said Pobjoy.
“This best-value, performance-based approach encourages innovation and gives us the opportunity to provide unique solutions, combining the best ideas with the right technology.”
Getting to green was not an option, said Pobjoy.
“Many of our customers view green as an important aspect of their business, and we support that by providing the appropriate services,” he said. “Having the ability to design-build green buildings positions us well in our current markets and allows us to expand into new markets.”
In the vice president’s estimation, the company has increased its expertise and depth within its in-house design staff “to have the ability to offer our customers a wide range of design-build solutions,” understanding the long-term operational benefits and costs of different technologies.
“We have grown our service capability and maintenance base to allow us direct contact with the end user and provide additional input on their operations,” he added.
Summing up Southland Industries’ perspective, Pobjoy said a sustainable focus has helped the firm expand its business in its current markets.
“Increasing awareness by owners has required us to look at projects that, in the past, were not considered priorities for green building, especially buildings that were more process-driven,” he concluded.
Publication date: 01/21/2008