Builders of offices have discovered that with a little thought and upfront expense, their structures can get an ecological seal of approval. They say that tenants with large appetites for space, the law and accounting firms whose leases usually launch such buildings, are starting to demand it.
John Buck Co. was among the first in Chicago to seize upon the trend. Its 51-story 111 S. Wacker building opened last June, and four months later crossed a green milestone.
It became the first new office building not designed for a single user to win what's called a LEED gold rating. LEED stands for Leadership in Energy and Environmental Design. It's a recognition of the structure's merit as judged by the U.S. Green Building Council, an industry group organized around promoting environmental awareness.
GREEN BUILDING COUNCIL
The U.S. Green Building Council in Washington, D.C., was founded in 1993. It has established rules for Leadership in Energy and Environmental Design certification for all types of building construction, commercial or residential, new or renovations.
For new office buildings, the council has four LEED levels: platinum, gold, silver and certified. They are awarded on a point system.
Points are given in the categories Sustainable Sites (Is it built on open space and near transportation?); Water Efficiency; Energy and Atmosphere; Materials and Resources; and Indoor Environmental Quality.
Developers said the platinum ranking is out of reach. It forces consideration of rooftop windmills to generate electricity and waterless urinals, something few office tenants would tolerate. So a gold ranking seems to combine prestige with practicality.
Further information is at
http://www.usgbc.org/.
Gold is the second highest of four ratings the organization gives office buildings. It's awarded on a point system, with 111 S. Wacker accumulating its score on many factors, from the landscaping and storm-water collection system on its roof to the recycling system and bicycle storage space in the building's depths.
In between, attention was paid to column-free floors that allow deep penetration of natural light. Working with architectural firm Goettsch Partners and other advisers, Buck met standards for sourcing construction material nearby, with much of it recycled, and for the design and installation of air-filtration systems and monitors for indoor pollutants.
Why go to the trouble? Daniel Jenkins, principal at the Buck firm, said the little green details can produce savings for tenants. In turn, that enhances a building's image and can justify a higher rent.
The details include the programmable light switches and motion sensors that can reduce the electric bill. But Jenkins said those savings just scratch the surface. Expenses such as utilities or taxes are a small part of a tenant's overall occupancy costs. Typically, 81 percent of the cost is for the tenant's labor, he said.
By emphasizing cleaner air, natural light and other amenities, LEED-certified buildings can cut turnover and absenteeism, producing savings in the largest source of tenant expenses, Jenkins said.
Kent Swanson, chief financial officer at Buck, said understanding of the LEED process has grown quickly. When the Buck firm opened its 1 N. Wacker office tower in 2001, LEED was on no one's agenda. "It's now a conversation point, and many of the big tenants are demanding LEED certification. The larger organizations have corporate goals to support the environment," he said.
Swanson said Buck is again going for the gold rating for a potential office building at 155 N. Wacker that it currently is shopping to users. "It's getting to the point where if you're not LEED, you won't have the anchor tenants you need to start the building," he said.
Steven Nilles, a partner with the Goettsch firm, commented, "When an idea like this becomes mainstream, the power of the market is enormous." Nilles is certified in LEED design, an architectural subspecialty in increasing demand.
For evidence of cost savings, the Washington-based green building council points to studies showing that "people-friendly" green designs improve productivity by 16 percent. Nilles said companies have reported efficiency gains of from 10 percent to 26 percent.
With the concept fairly new, there are more promises than hard data. One of the biggest tenants at 111 S. Wacker, the law firm Lord Bissell & Brook, has been in the space barely a month so it cannot testify to productivity boosts, said its executive director, John Graff. But he said employees have praised the bright floors, the views and the building's recycling system. "It has improved their perception of their employer," he said, and become a recruitment tool.
Another downtown developer paying heed to LEED is Hines Interests, which is based in Houston, but battles Buck in introducing new buildings to Chicago. Hines achieved LEED silver designa-tion, the third highest ranking, for its office high-rise at 1 S. Dearborn.
Greg Van Schaack, Hines vice president, said some level of LEED ranking was demanded by the law firms Sidley Austin, which moved into 1 S. Dearborn, and Kirkland & Ellis, the anchor for a building Hines plans at 300 N. La Salle.
Jenkins said the cost of following LEED guidelines might add 1 percent to 2 percent to a typical construction budget. In the case of 111 S. Wacker, where Swanson pegged the construction budget at $270 million, the added cost was slight.
Property records show that the Buck firm and co-investors sold 111 S. Wacker last month to a German investment fund for $386 million. Buck will continue to collect fees for managing the property.
That's a nice return on a $270 million project, more than enough to put LEED on more developers' lips.
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