The Leader - May/June 2008 - (Page 18)

Gr een r eal e s tate : W Hat Yo u Really ne e D to kno W Knox, the Senior Director of Adobe Systems’ Global Facilities Services. Companies must green their existing workplaces. “As their leases come up for renewal, our Fortune 500 customers are hiring us to undertake green tenant improvements, and they are asking for that work to be LEED-certified,” says Jack Rizzo, Managing Director, ProLogis Global Construction. Adobe’s $1.4 million Green Retrofit of the three office towers in its San Jose, Calif., headquarters complex earned LEED-Platinum ratings and cut its electricity consumption by 35 percent, natural gas use by 41 percent, domestic potable water consumption by 22 percent, and landscape irrigation water use by 76 percent. The Green Retrofit boasted a 10.5 month payback, generated a 121 percent ROI, and saves Adobe $1.2 million annually. Is demolition ever the right choice for company-owned real estate? Yes. Some post-World War II buildings are unsalvageable. They were constructed at the lowest possible project cost for shortterm needs, not long-term durability, and they are hampered by the smallest center cores possible, low ceilings, undersized ducts, poor quality building materials, and obsolete building systems. Demolition can make way for the construction of a green building that re-uses the site’s infrastructure and recycles much of the construction debris, helping to create a more sustainable built environment over the long-term while bringing a company all of the benefits of a green building. Demolition also makes sense if an obsolete company-owned building sits on a transit-served property that can be re-developed with a compact mid- or high-rise green building that can replace all of the company’s suburban low-rise corporate campus workplaces. GloBal cliMate cHanGe is iMpactinG real estate noW Global climate change is not something that will happen some time in the future. It is happening now, and it is already having a significant impact on companies large and small. Insured losses from the greater number and severity of hurricanes and floods – along with heat waves, fires, hail storms, crop loss, and disease – have increased 15-fold in the last 30 years, costing insurance companies billions of dollars annually. Thus, insurance rates are rising significantly, particularly for at-risk workplaces locations. Swiss Re is going further. It is beginning to refuse coverage to those major companies, and their officers and directors, that haven’t implemented programs to significantly reduce their greenhouse gas footprints (and Swiss Re’s risks). Note: Green workplaces significantly lower a company’s greenhouse gas footprint. Ironically, even with the greater number of storms, global climate change is also causing drought and water scarcity around the world, directly impacting companies that use water in their manufacturing processes and building systems, and companies whose workers are struggling with increasingly higher potable water costs, or lack of potable water. Many regions – like the Atlanta metropolitan area, the U.S. Southwest, and Australia – are experiencing prolonged droughts. Conservation is a vital strategy, one that will soon become mandatory. Fortunately, green buildings reduce water consumption by 50 percent or more compared to conventional buildings. Green strategies like drought-tolerant landscaping and water-conserving irrigation systems reduce landscape water consumption by at least 50 percent. On-site wastewater treatment and recycling in building and irrigation systems is becoming increasingly necessary. Global climate change has also generated a growing number of real estateoriented regulations around the world and, increasingly, in the U.S. Thus far, these regulations have focused primarily on making buildings energy efficient to reduce greenhouse gas emissions. In Europe, for example, the EU’s Directive on Energy Performance of Buildings (EPBD) sets minimum energy performance standards for new buildings and the renovations of large buildings, and it requires that “Energy Passports” documenting their level of energy efficiency be posted on these buildings. Japan’s Energy Conservation Law imposes tight restrictions on energy consumption in factories, offices, residences, and other buildings. In April 2007, the U.S. Supreme Court demanded that the Federal government take action, ruling that, under the Clean Air Act, the EPA must regulate carbon dioxide emissions. As a first step in the right direction, Congress passed the 2007 Energy Independence and Security Act, which established government building energy efficiency standards, among other provisions. You need to know that, like it or not, the scope of environment-oriented building regulations is going to increase dramatically. In 2009, EU buildings will be required to display Ecology Certificates which document their overall environmental performance. tH e le aDe r 18 MaY / j u n e 2008

Table of Contents Feed for the Digital Edition of The Leader - May/June 2008

The Leader - May/June 2008 Leadership Contents Message from the CEO Real Estate in the News Green Real Estate Work Without Boundries Building Flexibility Into the Business Strategy Multi-Generational Work-Force Design Work Force Longevity Analysis Wells Fargo's David Nelson Pennsylvania's Michael Rossman Globalization 2.0 Site Selection Consultant Directory The New York Report: A Core of Traditional and State-of-the-Art Opportunities Discovery Forum Findings Industry Tracker Young Leader Career Development Effective Leadership Economic Development in the News A Look Ahead In Our Next Issue Calendar of Seminars Index of Advertisers Executive Development Spotlight

The Leader - May/June 2008

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