GlobeSt.com: What is your general approach to LEEDcertification?

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Gunter: We're trying to focus on sustainabledevelopment, and LEED is one of the tools we use. We're also usingother things that may or may not give us LEED points. The realissue is not LEED itself but how we can build more sustainableprojects. Sometimes LEED intersects with that, but sometimes itdoesn't.

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GlobeSt.com: Why doesn't it always intersect?

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Gunter: For the most part, LEED was created withoffice buildings in mind. But industrial real estate is more of acommodity than office buildings are. It's very price competitive.We have to be very careful about what we spend on LEED. If the costgoes too high, we're going to be knocked off the list and not getthe project. There are LEED points that don't give a return,particularly for industrial buildings. We have to look at whatmakes sense for the overall cost. What benefits does the tenantget?

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GlobeSt.com: Is silver the highest rating you could expectto get for industrial?

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Gunter: To get above silver, you need interiorwork too, and we don't build the interior until the tenant issigned. Unless you have tenant willing to pay for additional itemsto get to gold or platinum, you can't do it. We're starting to seetenants in the marketplace who have a corporate mandate, and that'sreally where you're going to see industrial buildings going to goldor platinum. But you can't get there without the tenant'scooperation. Generally, all our buildings are pretty close tosliver. We're not necessarily looking to get silver, but it worksout that way. We focus on building a quality building, and oftenthat means we end up meeting LEED requirements. But we're tweakingand doing things a bit differently.

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GlobeSt.com: What are some of the shortcomings ofLEED?

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Gunter: Needs are different for different regions.If you look at LEED buildings for each of our eight offices, therequirements are slightly different for each zone. In Chicago, youcan put in high efficiency lighting with ambient light sensors andadditional skylighting, so when it's a bright day, you don't needto use lights much. But in Florida it's too expensive to put inskylights because standard skylights don't meet hurricanerequirements. In Dallas, we use concrete instead of asphalt becauseof the soil types. But in Atlanta it's cost prohibitive to use allconcrete. Still, in most regions, we can justify getting to silver.We feel comfortable at that level.

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GlobeSt.com: Does LEED work for spec projects, or onlybuild-to-suits?

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Gunter: Most of the projects we're doing are spec,not build-to-suit. We've got 19 buildings in development, 6.8million sf. Almost all of them are spec, and we expect we'll getLEED certified for all of them. We've got one LEED build-to-suit.Some tenants say they'd like a LEED building, but once they realizewhat it will cost, they say, we don't really want to pay for it.Others say we absolutely need to have LEED certified buildings.

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GlobeSt.com: What is the future for LEED in industrialbuildings?

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Gunter: I think the higher levels of LEED aregoing to be driven by tenant demand. We're just starting to see thetip of that. One example would be Wal-Mart. Look at theirsustainability page, and it talks about what their goals are. Theyfigure about 80% of their environmental impact is in their supplychain, so the only way for them to have impact on sustainability isto require their suppliers to look at their impact and increasetheir sustainability. So what we're seeing with Wal-Mart is 40,000suppliers or whatever huge number being given a push. We've alreadyhad a tenant or two come to us and say we want to do LEED, and theytell us they're a supplier for Wal-Mart. Companies like Amazon.comare also more environmentally sensitive.

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The other way you're going to see further LEED use is throughmunicipal regulations. Some places are giving expedited approvalfor LEED buildings. And you're going to see them start to requiremore LEED buildings. They're going to write this into their codes.I'm a little concerned about this because you don't getcertification until a building is complete, so you could end up introuble with local authorities even though you tried your best. Itdepends on how they write the rules.

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