Existing Office Buildings Catching Up on Green

MIAMI-Office towers are feeling pressure to get green in a hurry. Besides the prospect of three gleaming new structures adding nearly two million square feet to existing inventory, a greater number of current and prospective tenants have launched their own sustainability initiatives.

The bottom line is, if a class A office building cannot prove its own interests in energy efficiency or environmental consciousness, it may have a more difficult time backfilling vacant floors. Worse yet, it may also stand to lose some corporate tenants it has kept in place for years or even decades.

Hence the importance of traditional office towers stepping up to seek LEED-EB status from the US Green Building Council. The Leadership in Energy and Environmental Design certification program was expanded to existing buildings in recent years after owners discovered practical methods of modifying facilities to use less power and water, generate less garbage and reduce their all-important carbon footprint.

Wachovia Financial Center, the tallest office tower in Downtown Miami and Florida’s biggest vertical building with 1.2 million square feet in 55 stories, made a pretty big deal of its LEED Gold certification earlier this year. Although the building is 98% occupied, its management remains conscious of which prospective tenants demand green, as well as current occupants that have come under new corporate mandates since their last renewal, says Don Cartwright, the building’s leasing director with Cushman & Wakefield.

“How important that stacks up remains to be seen, but if you can answer to the affirmative that your building is certified green, it’s an important box for them to check,” Cartwright tells GlobeSt.com. “We are absolutely in the heat of battle when it comes to new leases and renewals.”

Getting LEED certification now certainly gives Wachovia Financial Center a jump on the competition among several nearby buildings looking to strike sweet leasing deals on space that is either freshly built or about to become empty once other tenants move to the new buildings. The new gold status puts the 26-year-old tower “ahead of everything the city has built over two decades,” says Tim Keable, the building’s general manager.

In nearby Coral Gables, 355 Alhambra achieved LEED-EB Gold certification earlier this month. The 16-story, 224,000-square-foot building, which opened in 2001, earned its approval based on initiatives aimed at energy and water conservation, waste reduction, and green cleaning and pest control.

Brian Gale, managing director of the Miami office of Taylor & Mathis of Florida, the leasing agency for 355 Alhambra, says earning LEED status is necessary to compete with newer offices, even those built in the past decade. “Any new building is going to be built to LEED standards,” he says, “so it is important to be able to compete with those buildings.”

It may also become mandatory from a government standpoint, says Rich Bezold, chairman of the real estate department at Miami-based law firm Akerman Senterfitt. State and federal legislation may eventually mandate retrofitting of existing buildings to green standards, with upfront costs eventually being recovered through energy and other savings, he says.

“The owners gain a competitive edge if they can lower their operating costs, and that savings can be passed along to their tenants,” Bezold says. He points out that there are more green products on the market now than just a few years ago, and at more favorable pricing.

Renting space in LEED-certified office buildings is apparently no more costly than those that aren’t. Asking rents at 355 Alhambra and Wachovia Financial Center are within range of the averages for their respective submarkets—$40 per square foot in Coral Gables, $52 per square foot in Downtown Miami, according to Cushman & Wakefield.