Green Building Megatrends for Arizona
In southern Arizona, we’ve seen 2013 bring a resurgence of commercial and residential development. Looking elsewhere, both in Arizona and in the broader West, we see a resumption of a strong push for sustainable development. In this report, I’d like to list 10 “Megatrends” that I think will influence development for the rest of the decade, both in our area and in the larger region. As we confront growing pressures on key energy and water supplies, the one overriding Megatrend is “sustainable development”. Let’s take a look at the trends that will define it. Here are my Top Ten:
- Commercial Sector Greening
- Government & NGO Focus on Sustainability
- Greening of Existing Buildings
- Using the Cloud to Enhance Building Performance
- Building Performance Disclosure
- Water: a Green Building Issue
- Solar Power Use
- Zero-Net-Energy Buildings Gain Popularity
- Local Mandates for Sustainable Development
- Property Issues Go Global
Let’s take a look at each one of these Megatrends in turn; we’ll also look at how they affect each other.
Commercial Sector Greening. There are now more than 16,000 LEED certified projects and 36,000 more underway, as of March 2013. About 60 percent of these projects involve new construction, with more than half of them coming from the commercial sector. In addition, about 14 percent more projects involve green upgrades of existing buildings, with more than 80 percent of those from commercial buildings. Examples of such projects include the 240,000-sq.ft., UniSource headquarters building in downtown Tucson, opened at the end of 2011 and certified at the LEED Gold level last October by our firm. For commercial property owners, a LEED certification is the best insurance against a portfolio losing value over time, as the interests of tenants, lenders and investors increasingly shift to green real estate.
Government and NGO Focus on Sustainability. On April 22, 2013, the “greenest” building in the US opened for business in Seattle. The Bullitt Center, funded by the nonprofit Bullitt Foundation, aims for this 50,000-sq.ft. office building to achieve both LEED Platinum and Living Building certifications, the latter requiring, among other things, a measured and reported net-zero energy use on an annual basis. I have toured this building, which features a sombrero-like rooftop Photovoltaic power system that juts out over the street below. The Foundation worked with the City of Seattle toward performance-based code interpretations for sustainable features; in other words, the City threw out the “20th-Century rule book” to promote sustainable building for the 21st Century. It’s a step that we will see other cities in our region take in the next 1-2 years.
Greening of Existing Buildings. Over the past five quarters, the gross floor area of existing buildings receiving LEED certification has consistently exceeded that of new construction. A green certification is the best way to “re-brand” older real estate and attract higher-quality tenants, both for corporate owners and commercial developers. The largest global real estate manager, CBRE, has already certified more than 200 properties to the LEED for Existing Buildings: Operations and Maintenance (LEED-EBOM) standard.
Using the Cloud to Enhance Building Performance. We now have the ability to monitor and control buildings in real-time with any web-enabled device, using a variety of software platforms. Beyond just data visualization and analytics, this “software as a service” allows building control and remote fault detection, along with full sustainability reporting capabilities. My company has been working with an Australian software vendor to bring these capabilities to property owners and managers at a very reasonable cost.
Building Performance Disclosure. Like it or not, many US cities are beginning to require disclosure of energy use by commercial properties (above 50,000 sq.ft. typically). This movement started in San Francisco and Seattle, but I wouldn’t be surprised to see it spread to Tucson and Phoenix before long. Another good reason to give your properties an energy audit and low-cost/no-cost tune-up this year!
Water as a Green Building Issue. We don’t have to tell Arizonans that adequate water supply is going to be an ongoing issue for development, but it may come as a surprise to you that you can cut water use 40% or more, in both residential and commercial development, with relatively simple design measures. In fact, my recent book, Dry Run: Preventing the Next Urban Water Crisis, shows you how this is being done all over the US as well as in Europe and Australia.
Solar Power Use. It’s Arizona and we have plenty of sun, folks! Start looking for solar power on many new homes and a lot of businesses, especially as third-party financing programs become routine. Already, there’s lots of solar on parking garages and carports all over Arizona, as well as utility-scale stand-along systems. This Megatrend means you should start planning for each new development to showcase the maximum solar power it can handle. Even as utility subsidies diminish, solar power costs are coming down to a commercially viable cost. And everyone can see what you’ve done!
Zero-Net-Energy Buildings Gain Popularity. Solar power use allows you to participate in the next big Megatrend, zero-net-energy projects. Almost any low-rise office, government or apartment building can produce enough solar energy each year to offset its demand, especially if it’s been designed right or retrofitted to cut energy use.
Local Mandates for Sustainable Development. Even in a property-rights state like Arizona, I wouldn’t be surprised to see more local mandates for green development, especially when considering the full range of energy, water and land use issues in Arizona. Look for local governments to focus on walkable communities, solar power, capturing stormwater runoff for irrigation, high levels of water and energy conservation, etc.
Property Issues Go Global. If you consider both equity and debt for real estate, along with corporate tenancy, you quickly realize that property is a global asset and increasingly needs to be managed as such. The latest trend in property assessment is the Global Real Estate Sustainability Benchmark (http://www.gresb.com), which has been adopted as a standard reporting format by more than 400 global developers and investors. Knowing what makes sense to people with money to put into real estate development will make your company a more valuable partner for them.