Does “going green” create building sale and rental price premiums?

There’s a new study out that helps answer this question. The study, conducted by experts working with the Royal Institute of Chartered Surveyors (RICS), assesses the financial performance of green office buildings in the United States. Is there a premium associated with a green designation for your building?

Based on the methodology and data examined for this study, the researches found that there was in fact a rent premium or approximately 3% associated with “green rated” office buildings.

Regarding building sales, the study found that green buildings enjoyed a 16% price premium in sales price over similar non-green buildings (not taking into consideration, however, any costs incurred in converting or upgrading the building to achieve green status).

To review the study’s methodology and detailed number-crunching, see the full report (“Doing Well by Doing Good”) here: http://www.rics.org/NR/rdonlyres/44F67595-7989-45C7-B489-7E2B84F9DA76/0/DoingWellbyDoingGood.pdf.

Construction Industry Trade Organization Opposes Cap and Trade Legislation

The House will likely consider a "cap-and-trade" bill this Friday. The Associated General Contractors of America has voiced concern that the proposed legislation would be too great of a constraint on the construction industry. For more, see: http://www.bipac.net/issue_alert.asp?g=AGC&issue=GHG&parent=AGC and
http://www.washingtonpost.com/wp-dyn/content/article/2009/06/23/AR2009062303456.html

Harvard Law Releases Green Building White Paper

Harvard Law School’s Environmental Law & Policy Clinic has released a new white paper entitled The Green Building Revolution: Addressing and Managing Legal Risks and Liabilities (March 10, 2009). In its own words, the paper “addresses the current movement toward green building, the increasing number of mandates requiring it, and the benefits and costs associated with building green; analyzes the legal risks and potential liabilities to those involved in green building; and concludes with practical recommendations for minimizing such risks and liabilities.”

Among the identified legal risks and liabilities are:

For owners: failure to achieve desired building certification and failure to qualify for tax credits

For design professionals: an increased standard of care, liability for design effects due to failure of systems to perform over lifecycle, and insurance exclusions where specific outcomes are warranted.

For contractors: failure to deliver features as required by specifications, green-related construction defects, and warranty exclusions in insurance policies if particular sustainability outcomes are guaranteed.

For building tenants: failure to meet expectation for improved worker health, productivity, and utility costs.

The paper concludes with recommendations for managing these risks and liabilities. They include: use of careful contract language regarding expectations, specifications, and schedules; enhanced project management; special attention to insurance policy language; and aligning marketing documents with reality regarding green expectations.

See the entire white paper at: http://www.mgkflaw.com/Green%20Building%20Revolution.pdf

Redefining Corporate Sustainability and Responsibility — A New Paradigm

The Oregon Legislature has proposed a bill to mirror the current climate of increased acceptance for corporate sustainability and corporate social responsibility. HB 2829 remains pending, but is overt indicia of the State of Oregon’s embrace of sustainable values in the corporate realm. This article, written by our colleagues at Jordan Schrader Ramis PC, Damien Hall and Bob Blackmore and published in the AOI Business Viewpoint weekly magazine, sheds further light on the state of the Oregon Corporate Code as it pertains to sustainability.