Presentation to Build Sask Green conference in Regina, Saskatchewan, Canada, on October 15, 2010

1. The Business Case for Green Building Jerry Yudelson Yudelson Associates 2010

2. One “Take Away” Anyone involved with a new commercial development, university, school or public project today, not making it as green – and low carbon – as possible, will have a building that’s functionally obsolete the day it opens for business and then economically disadvantaged for its entire lifetime. Entire building portfolios could become devalued in this time of rapid market convergence to low carbon and green development. This creates both challenges and opportunities for everyone.

3. The Big Picture (BP)

4. Green Building Important for Carbon Reduction HOK Architects, LEED-CI Office Toronto

8. 150 billion sf will be new constructionTherefore, by the year 2035, three-quarters of building stock will be new or renovated vs. 2005

9. Life Cycle Positive Solution Buildings are the only Life Cycle Cost-positive solution 25% of total carbon solution can come from buildings, including homes, stores, offices, hotels, institutional buildings and other structures Choosing Green Choosing Green

10. Green Building Is Growing Rapidly Smith Carter SC3 Offices, Winnipeg, LEED Platinum

11. 2010 Trends: A Baker’s Dozen + 1

12. Green Building Statistics USGBC: 16,000+ members LEED Commercial Projects (US) 28,000 registered (July 2010) 6,400 certified (July 2010) Ave. size ~ 100,000-sq.ft. LEED Commercial Projects (CA) 289 certified (Sept.) 2000 registered (Sept.) LEED for Homes (US) 6800 certified 27,000 registered (July 2010) 155,000+ LEED AP’s TELUS House, Ottawa LEED Gold “In God We Trust; All Others Must Bring Data.” -W. Edwards Deming

13. LEED Growth Slows Down! 2005 to 2006: +50% cumulative growth in new LEED registered projects 2006 to 2007: +75% 2007 to 2008: +80% 2009 to 2010: +70% 2010 to 2011: only 10% thru July! New York City LEED: Platinum $1 billion

14. LEED Growth - Project Registrations

15. LEED Growth – Project Certifications

16. US Green Building Market Projections Source: EL Insights, http://tinyurl.com/2egzhub

17. Greg Kats: Greening Our Built World 14% reduction in CO2, 2025 vs. 2005 NPV of green building: $650 billion in U.S. 5x to 10x cost premium 2020 Prediction: Green buildings 95% of new construction Green retrofits are 75% of all retrofits

18. Green Buildings Make Money Sense

19. Business Case for Green Financial/economic return Risk mitigation Marketing/public relations Productivity/health gains Recruitment/retention Prevent “value erosion” Sustainability concerns Northfield Stapleton, Denver LEED Silver

20. Proven Benefits Absenteeism (15%) Rental Rates (up to 174%) Carbon Emissions (35%) Occupancy Rates (3-4.1%) Energy Costs (30%) Office Productivity (2.8-20%) Hospital Stays (2.5 Days) Factory Productivity Waste Management Costs (50-90%) Retail Sales Per Square Foot Performance on School Tests (20%) Water Usage (30-50%)

21. LEED Rent Premium

24. Responsible Property Investing Energy Star properties (U.S.) 5.9% higher income per sq.ft. 13.5% higher market values per sq.ft. Slightly higher multiple of net annual income to value Source: Gary Pivo and Jeffrey Fisher, U. of Arizona/Indiana, “Investment Returns from Responsible Property Investments: 1998-2008,” March ‘09

25. These are Global Trends “Real estate managers and managers are adopting greener business practices in all regions of the world…” Globalization is reinforcing and accelerating these sustainable property development and operating trends” Multi-national corporations and global investment firms are especially important in establishing greener real estate business practices worldwide through their tenancy and investment criteria” Major corporate tenants are seeking greener facilities, to attract and retain workers, differentiate their products, improve image and satisfy stakeholder demands…” Source: “Globalization and Global Trends in Green Real Estate Investment,” RREEF Research/Deutsche Bank, September 2008.

28. 500 tenants in 154 LEED buildings

29. 100 Pine St., San Fran.

30. 55% said: more productive

31. Average gain: 4.9%

32. $5,200 value add/employee

33. $21/sq.ft.

34. 45% said: reduced sick days

35. Average: 2.88 days less

37. 2010 LEED Predictions New buildings: 2500 new U.S. LEED project registrations in First Half 2010 Recessionary impact 2100 new project certifications Value of new LEED project registrations in 2010: >$35 billion Child Development Centre, University of Calgary, LEED Platinum

38. Business Case for a Bad Building? Competitive disadvantage today Will have to disclose energy use in future Liability for sick building syndrome? Lower productivity? Health hazard? Value erosion in future? Manitoba Hydro Place Winnipeg

39. Greening Existing Buildings: The Next Big Challenge Must improve existing buildings to meet carbon reduction goals Very cost-effective to cut energy/water use by 30% to 40% Many outstanding examples nationwide Oxford Centre, Toronto LEED-EB Silver, 2008

40. LEED-EBOM Registrations

41. Direct Economic Benefits – Greening Existing Buildings

42. Greening Existing Buildings: Next Big Challenge Need to green existing building stock rapidly Over 4,800 LEED-EBOM buildings registered Avg.: 300,000-sq.ft. 40 in Canada, only 7 Certified Example: CBRE 100 buildings certified Example: Chicago Merchandise Mart 4 million-sq.ft. Merchandise Mart, Chicago LEED-EB Silver

43. Case Study: Empire State Building Built 1931; 2.8m sq.ft. Key Outside Players: Jones Lang LaSalle Johnson Controls Clinton Climate Initiative Completion: late 2012 All projects 38% expected energy savings $4.4 Million Savings! Goal: LEED-EB Gold

44. Water Use Concerns Growing… Urban water concerns are likely to increase Good design & practice can reduce water use +50% in buildings Retrofits can reduce water use 35% to 75% Australia is the case study, the testing ground 150 liters/capita/day U.S: 150 gallons/cap/day!

45. The Future is Green, But… If you want to score, skate to where the puck is headed, not to where it is now. Ask yourself: how green will the built environment be in 2015? What will be the New Normal? Poorly performing buildings will pay a penalty in that market!

46. Conclusions? Green building is here to stay Pace of adoption is rapid in schools, existing buildings Green buildings & homes Renewable energy & efficiency go with green building Still concern over actual building performance This will be addressed in next 3 to 5 years Building management will use “cloud”: SaaS Focus shifting rapidly to greening existing buildings Opportunities abound for nimble companies

47. Take-Aways

48. Jerry Yudelson Yudelson Associates August 2010 THANK YOU!

49. Further Resources Books by Jerry Yudelson: Dry Run: Preventing the Next Urban Water Crisis (2010) Greening Existing Buildings (2009) Sustainable Retail Development: New Success Strategies (2009) Green Building Trends: Europe (2009) Green Building through Integrated Design (2008) Choosing Green: The Home Buyer’s Guide to Good Green Homes (2008) Green Building: A to Z (2007) The Green Building Revolution (2007) Marketing Green Building Services: Strategies for Success (2007)