7 nov 07 | The Chicago Tribune
Developers embracing "green" to gain an edge
By Susan Diesenhouse
Real estate long had one guiding principle: location. Now, environmental sustainability has joined the top tier of industry tenets in these times of financial turmoil and fierce competition for renters and workers.
The new commercial property mantra is cost, location and "green" said Youguo Liang, an economist who is a managing director at Prudential Real Estate Investors.
But it is more than a slogan, because green coupled with cost adds up to a business advantage, Christopher Kennedy, president, said in an interview.
"It's critical for tenant recruitment and retention," he said.
A recent push to enhance the green attributes of the 4.2 million-square-foot showroom and office building, with its 380 miles of electrical wiring and 4,000 windows, has paid off by lowering operating costs, he said.
"We're saving on water, gas and electricity at a time when we expect rates to spike," noted Kennedy about running the 1928 building.
The Mart also has a system to monitor everything from power to the paper that enters or leaves it, as well as green guidelines for all vendors and professionals, such as architects and engineers that the company employs.
On Thursday, the Mart will receive certification as a LEED (Leadership in Energy and Environmental Design) building, making it the largest in the world to do so, at the U.S. Green Building Council's conference being held in Chicago, Kennedy said.
But beyond the behemoths, green has allure for a wide array of businesses. Almost 80 percent of corporate real estate users and executives said it is important to assume the extra time and expense to build green office towers, according to a recent study by CoreNet Global, a trade association, and Jones Lang LaSalle Inc., a real estate services and investment firm.
Over time, these buildings can be more economical, said Adrian Smith, a principal at the Adrian Smith + Gordon Gill Architecture firm based in Chicago.
"More efficient energy use means mechanical systems for heating and cooling can be smaller," he explained.
Green function is changing building form to give office towers a new look.
"We just finished designing the Pearl River Tower in Guangzhou, China, that is shaped to harvest the sun and wind for energy, and it has a strikingly different appearance," said Smith, whose firm specializes in green architecture.
The 68-story tower looks like a high-back chair with three big cushions, each stacked atop the other.
Smaller property owners also are finding appeal in green.
For instance, American Technical Publishers Inc. is developing a $10 million green headquarters in Orland Park. Construction on the 45,000-square-foot, three-story building started in September and will be completed in two years, said company President Robert Deisinger, who will seek LEED certification.
The building will feature native plant landscaping along with floors that are raised so the individually controlled heat can come from below, said the trade and educational publisher.
The Hearst Corp., meanwhile, completed a $500 million LEED-certified Manhattan headquarters last year that cost 2.5 percent more than conventional construction, said Vice President Brian Schwagerl.
"It paid for itself immediately with lower utility costs and higher employee satisfaction," he said. "In the long term, it will be more valuable than an ordinary tower."