For those skeptics who were convinced that green building was a mere passing fad, a new survey by National Real Estate Investor and its sister publications may prove otherwise. The survey reveals that not only is green building gaining momentum as a commercial real estate strategy, but it is also vying for status as the new industry standard.

In fact the exclusive survey, which drew responses from 218 corporate users and 166 developers of commercial real estate, reveals that 52% of corporate respondents and 39% of developer respondents currently own, manage or lease at least some “green” properties.

Even more compelling is the fact that the focus on sustainable real estate is clearly on the rise with 84% of corporate users and 77% of developers expecting to own, manage or lease at least some green properties five years from now [Fig. 1].

“I think there is a tremendous amount of momentum for sustainable development,” says Tom Bisacquino, president of the National Association of Industrial and Office Properties (NAIOP). “The cost of energy is growing exponentially, and many feel that energy costs will continue to rise. So the business case for developing green is getting stronger and stronger.”

Generally, the “green” label in commercial real estate applies loosely to a growing list of sustainable building practices, ranging from energy-efficient lighting and air purification systems to recycled carpet. Specifically, green buildings are being measured by emerging industry standards such as Energy Star and the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system.

Energy Star is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy that focuses on energy efficient products and practices. Buildings that earn the Energy Star designation use about 35% less energy than average buildings. More than 3,200 buildings totaling nearly 575 million sq. ft. carry the Energy Star seal of approval.

In contrast, the LEED program promotes a whole-building approach to sustainability by recognizing performance in five key areas that include human and environmental health, sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality.

Survey results support the premise that corporations and developers are embracing green building practices. Respondents expect that green building ownership and management will increase dramatically in just a few short years.

Corporate users anticipate that the amount of green facilities they own or lease will more than double from 9% to 21% in the next five years. Developers also expect the volume of green properties in their portfolios to take a similar jump from 9% to 20% by 2012 [Fig. 2].

“I think that 21% is pretty conservative,” says Randy Knox, Adobe’s senior director of global facilities services at Adobe Systems Inc. in San Jose, Calif. “I think green building is really starting to snowball.” Adobe is the only company in the world to occupy three platinum-level LEED buildings, totaling 960,000 sq. ft., the highest rating offered by LEED.

The software giant plans to roll out more green design elements and pursue LEED certification for commercial interiors within its 2.7 million sq. ft. portfolio of leased space. “We do a lot of development work around the world, and we are looking at taking this certification process global,” Knox says.

A snapshot of respondents shows that nearly half of corporate users (48%) own or lease more than 150,000 sq. ft. of space, while 47% of developers own or manage more than 150,000 sq. ft. of space.

Respondents are most likely to be involved in office and retail. Among developers, 55% own or manage retail, followed by office (48%) and mixed-use and hospitality (35% each). On the corporate side, 51% of respondents own or lease office space, followed by industrial (42%) and retail (25%) [Fig. 3].

Green gains momentum
One key indicator about the speed with which green building is taking hold can be found in attitudes toward the site selection process. About half of respondents — 46% of corporate users and 51% of developers — consider green design either important or extremely important.

Only 17% of corporate users say green design is not at all important in the site selection process, while just 10% of developers say it is not at all important to their company for current or future development [Fig. 4].

Corporations ranging from Bank of America to Best Buy are incorporating green building as part of their real estate strategies, and developers are clearly responding to the rising demand for these facilities. “Tenants understand that energy savings go straight to their bottom line, and they also are concerned about the environment they are creating for their employees,” says Jerry Lea, a senior vice president at Houston-based developer Hines, an Energy Star partner since 1999.

About 18 months ago, Hines adopted a strategy to LEED-certify all new office projects in which it has an ownership stake. Currently, the developer has more than 50 buildings that are either LEED-certified, pre-certified or registered for certification.

In September 2006, Hines­­­­ launched a joint venture with CalPERS to create a Green Development Fund with more than $120 million in equity that focuses solely on developing LEED-

certified office buildings. “The competitive nature of the business is such that developers will continue to ratchet up and green building will become more prevalent,” Lea says.

Hines is not alone. Major commercial real estate developers across the country have implemented similar strategies. “We want to do sustainable development for 100% of the work that we do,” says Dan Young Dixon, director of national design for Opus Architects and Engineers, a division of Minnetonka, Minn.-based Opus Corp.