Post-Katrina energy prices are highlighting the benefits of building green office buildings. In Chicago, for example, Hines is about to finish an 820,000 sq. ft. office tower at One South Dearborn St. — and it’s expected to become one of Illinois’ most environmentally advanced properties under a new government pilot program called Leadership in Energy and Environmental Design Core and Shell (LEED-CS). This will be Hines’ second LEED-certified building. The first was Atlanta’s 1180 Peachtree Lane, a 50-story skyscraper that Houston-based Hines recently completed.
What does LEED-certified mean? Under Washington-based U.S. Green Building Council (USGBC) guidelines, it demands that projects adhere to a host of requirements including materials and locations in close proximity to mass transit that limit the number of tenants driving to and from a building. Energy and water efficiencies also are stressed, including less fluorescent lighting and waterless urinals.
In One Dearborn’s case, the property will be 30% more energy efficient than normal office towers. Some of the green features will include 40-foot-tall sugar maple trees that will be irrigated with condensation collected from the building’s mechanical systems. Ultraviolet lights in the HVAC system will improve indoor air quality by reducing airborne contaminants including molds, bacteria and viruses. These lights also improve the mechanical efficiency of the equipment and eliminate the need to use harmful cleaning chemicals.
Law firm Sidley Austin Brown & Wood will lease more than 500,000 sq. ft. of office space within the building. The law firm now leases space at Bank One Plaza, which is located across the street from One South Dearborn. According to Hines, the building is 81% pre-leased. That strong rent roll is important given Chicago’s steep office vacancy at mid-year. Grubb & Ellis reports that Chicago’s CBD office vacancy for Class A space stood at 19.1% at mid-year, which was well above the national average of 15.6%.
There are many other advantages to building so-called “green” buildings. Landlords can trim their energy costs through devices such as solar panels. According to the USGBC, the Education Headquarters Building in Sacramento, Calif., saved taxpayers $500,000 in 2003 through reduced energy costs. That property, like many others in the state, is a LEED-certified, green building. So far, roughly 1,700 commercial properties have qualified for LEED certification. Another 1,800 have applied for certification.
“We look for recycled steel in new construction projects, along with the use of materials that have helped the local economy,” says Taryn Holowka spokesperson for USGBC. The benefit of such materials is two-fold — less gasoline is used to transport them across the country while local businesses can profit from the sale.
Building to LEED specifications may be good for the environment, but it also can cost more to construct. Holowka estimates that it costs up to 7% more for a developer to build a green building. She admits that local factors such as the cost of land, materials and labor are the greatest single variable.