In accordance with that, Bank of America plans to create customized solutions for its commercial real estate lending clients who are developing environmentally sustainable designs.

Smaller lenders also are getting in the game. United Community Bank in Savannah, Ga. announced this past summer that it would offer property owners, builders and general contractors a reduction of 25 basis points in construction financing for any commercial or residential project that achieves LEED or EarthCraft certification from the Southface Energy Institute in Atlanta.

“We are trying to do our part to support green building, and it may make builders more conscious of sustainable building,” says Deepika Paul, a senior vice president at United Community Bank. The bank now has three green loans that it is underwriting. Only those loans that the bank holds in its own portfolio are eligible for the discount.

The insurance industry also is taking notice of the benefits of green building. Some insurance providers are beginning to recognize that green buildings should be rated more favorably due to their high-performance design that often involves state-of-the-art specifications for mechanical systems, as well as more rigorous inspections to guarantee LEED or Energy Star ratings.

Fireman’s Fund Insurance Co. based in Novato, Calif. was the first U.S. insurance company to offer special coverage for green designated commercial properties. Fireman’s Fund green coverage offers reductions up to 5% of the total premium on green buildings.

LEED sets the bar
One of the biggest advances in sustainable development has been the movement toward a universal standard that quantifies green building with the LEED rating system. More than one-third of respondents, including 41% of developers and 37% of corporate users, have heard of the LEED program.

Every business day $100 million worth of construction registers with LEED, and an estimated 10% of the construction market is currently following green building practices, according to the U.S. Green Building Council.

LEED projects are found in every state and in 26 countries with roughly 1,059 certified projects and 7,843 registered or pending projects worldwide. Although the 4 billion sq. ft. of LEED projects represent a small fraction of the overall commercial real estate universe, the volume of LEED-designated buildings is clearly on the rise.

However, it appears there is still a bit of gray area when it comes to understanding LEED and the definition of green buildings. Of the green buildings in their portfolio, more than half of respondents — 63% of corporate users and 55% of developers — were unsure or did not know their specific designation.

The Hearst Tower was the first occupied building in New York to obtain a gold-level LEED certification. “A lot of times I think the discussion on sustainability gets lost in the language,” says Schwagerl of Hearst Corp. LEED basically provides a blueprint for creating a sustainable building. The guidelines make it easy for a layperson to understand the various elements of green building, and provide a good way for the whole building team to stay on track — understanding and achieving the same goals, he adds.

Four in five corporate respondents (80%) who are familiar with LEED consider it an effective standard for energy savings, while 74% believe it is an effective standard for environmentally friendly building. Among developers, 56% believe LEED is an effective standard for energy savings, and 62% say it is an effective tool for environmentally friendly building.

Forest City Enterprises based in Cleveland has obtained LEED designations on several major projects, including a silver rating for its Northfield Stapleton retail development in Denver. “LEED has served as a catalyst for the green discussion, but what is permeating the industry is a focus on best practices,” says Jon Ratner, director of sustainability initiatives for the developer.

Not only did Forest City work to ensure that the exterior core and shell aspects of the 1.2 million sq. ft. project followed LEED guidelines, but also worked to educate and influence its 50 tenants to implement green building practices within their own leased spaces.

“We are committed to building green,” Ratner notes, “but we recognize that this is a journey that we are on in terms of the constant exploration of new techniques, new technology and new approaches to sustainable development.”

Are incentives falling flat?
Federal, state and local governments have been working to encourage sustainable development with programs ranging from tax rebates and grants to preferential zoning and fast-track development schedules.

A variety of legislation, resolutions, ordinances, policies, and incentives to encourage LEED initiatives can be found in cities, counties, towns, states, schools, and federal agencies across the United States and Canada.

The majority of corporate and developer respondents — 74% and 71% respectively — have noticed an increase in green building initiatives from local, state and federal government. Yet nearly three-fourths of respondents — 77% of corporate users and 72% of developers — have not taken advantage of government incentives for green building developments.

One reason the use of incentives is not higher is that government programs vary widely across the country depending on the city, county and state in terms of the type of programs offered, how they operate, and how effective they are at encouraging green building.

Among respondents who have taken advantage of incentives, the most commonly used are tax breaks, fee waivers and a “fast-track” permitting process. Among corporate users, 14% have used tax breaks while 7% have used fee waivers and 6% have taken advantage of fast-track permitting. Some 15% of developers say they have used tax breaks, followed by fast-track permitting (5%) and fee waivers (4%) [Fig. 12].

Hearst received a $250,000 grant from the New York State Energy Research Development Agency, which it used to hire green consultants and get its project on track during the early planning stages. “I believe these grants make a difference, and I think it’s important to have government as a partner in your project going forward,” says Schwagerl.