In fact, 75% of the 754 commercial real estate executives surveyed said that they would not be less likely to construct "green buildings" despite concerns about the availability of funds. The respondents said they viewed green buildings as having lower energy, operating and lifecycle costs, higher building values, asking rents and occupancy rates. Respondents also noted that green buildings can generate greater investment returns.

"This was really good news," says Michael Deane, vp and chief sustainability officer for New York City-based Turner. "We now know that we can deliver a LEED Silver or LEED Gold building at just a 1%, 2% or 3% premium. That will give you a really good payback."

Turner Construction has conducted surveys on different aspects of green development since 2004, and has seen interest in sustainable building practices grow. In the 2004 survey of architects, engineers, owners and developers, Deane notes, 90% of the respondents said that they expected to be doing "significantly more" green building in three years, a prediction that largely has come to pass.

"It was pretty big news," Deane says. Turner has completed 80 LEED projects, and has another 125 in the works, making green building about 25% of its business.

However, there is work to be done to educate executives about the costs of green construction--many assume that it is much more expensive than is true. The 2004 survey noted that perception of higher costs was a major obstacle to green development, cited by 90% of respondents. That's improved, but the industry still has a long way to go.

"This was based on the idea that it cost 18% to 20% more to build green," Deane says. "When you fast-forward to 2008, the number one obstacle is difficulty with LEED documentation and cost [cited by 54%], but 50% still cite higher construction costs."

The perception still lingers, for many, that sustainability will add 15% to the construction cost of a project, he says, and there's one major way to correct that. "We've got to keep saying it--it's education, education, education," Deane says. "We still have more work to do."

Once they learn the truth about costs and benefits, executives embrace green building and the LEED certification enthusiastically, the report notes. Despite the perceptions that achieving LEED status was a problem, 83% of the respondents said their companies would be very or extremely likely to seek certification for their green buildings, for a variety of operational, financial and quality of life reasons.

As a group, 84% of executives said energy costs were lower in green buildings, with 68% stating overall operating costs were lower. Of the executives who said their companies would seek Gold or Platinum LEED certification, 84% said the buildings would recoup their higher construction costs.

Executives noted that green buildings perform better financially, with higher values--cited by 72% of respondents--higher asking rents --65%--greater return on investment--52%--and higher occupancy rates--49%. Less quantifiable benefits also were noted, including improved occupant health--76%--and higher worker productivity--46%.

The survey was conducted in September 2008, querying real estate owners and developers, real estate brokers, architectural firms, engineering firms, and corporations working in all commercial real estate sectors. That should continue to increase: Deane reports that clients now come to him with specific, non-negotiable requests for energy efficiency.

"Even in a tight market, we're not going to value-engineering green out of a building, because it's still important," Deane says. "We're finally having the right conversation."

Instant Insights /

Survey: Despite Crunch, Developers Commit To Green

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