burnham-moores center for real estate university of san diego
DESCRIPTION
Burnham-Moores Center for Real Estate University of San Diego. The Economics of Green October 30, 2007 Dr. Norm Miller, Jay Spivey (CoStar Research Director and Andy Florance, CEO, CoStar). Evolution of a Cynic. 2002 on a panel at Realcomm in Chicago my view was basically this… - PowerPoint PPT PresentationTRANSCRIPT
![Page 1: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/1.jpg)
Burnham-MooresCenter for Real Estate
University of San DiegoThe Economics of Green
October 30, 2007
Dr. Norm Miller, Jay Spivey (CoStar Research Director and Andy Florance, CEO, CoStar)
![Page 2: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/2.jpg)
Evolution of a Cynic
• 2002 on a panel at Realcomm in Chicago my view was basically this… as long as landlords used triple net leases there would be little owner driven incentive to invest in any form of energy or building efficiency. …most benefits of high performance and healthy buildings do not accrue to landlords
![Page 3: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/3.jpg)
0
1
2
3
4
5
6
7
Certified Silver Gold Platinum
Extra Costs in Percentage to Build GreenSource: USGBC
External estimates average closer to 3%
down from prior year when 15% was
the norm
![Page 4: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/4.jpg)
EXTRA COSTS VARY BY MARKET
Platinum Gold SilverUCSB Ave. 7.8 % 2.7 % 1.0 %
San Francisco 7.8 % 2.7 % 1.0 %Merced 10.3 % 5.3 % 3.7 %Denver 7.6 % 2.8 % 1.2 %Boston 8.8 % 4.2 % 2.6 %
Houston 9.1 % 6.3 % 1.7 %
Source: U.S. Green Building Council, USGBC.org
![Page 5: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/5.jpg)
Real barriers to going green
• The Who Moved My Cheese Mentality– If it ain’t broke don’t fix it…..– Culture– Education– Coordination– First time mental blocks (inexperience)– Cynicism over benefits– Perverse incentives, i.e. admin fees charged on pass
through and common expenses by management.– Lease structures that don’t align incentives
![Page 6: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/6.jpg)
Actual proportion of green LEED certified buildings
• Only a fraction of existing stock but…• 30% of all new Class A buildings • 100% of all new Class A in NY City• 100% of all new Class A in Boston (50,000
sq ft or larger)• Quickly LEED is becoming the de facto
standard
![Page 7: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/7.jpg)
So let’s look at the numbers from the first nationwide study using CoStar data…
Costs and Benefits
![Page 8: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/8.jpg)
![Page 9: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/9.jpg)
![Page 10: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/10.jpg)
![Page 11: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/11.jpg)
30% premium
![Page 12: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/12.jpg)
![Page 13: Burnham-Moores Center for Real Estate University of San Diego](https://reader035.vdocuments.net/reader035/viewer/2022062816/56816836550346895dddf360/html5/thumbnails/13.jpg)
Summary• Green is not “easy” but it is getting easier.
– The big hurdle is mental!• Non-green buildings are going to become becoming
obsolete much faster today.• The benefits of green are not only the quantifiable but also
qualitative (happier workers, more retail sales but also simply doing good by saving resources)
• We need more transparency, better standards, more shared best practices and more enlightened government.