PITTSBURGH-Holdouts passing off the sustainability issue as a tree-hugger’s passion with no place in a for-profit business plan would get an education if they were in Pittsburgh this week. Speakers at Developing Green: Integrating Sustainability With Success, a two-day conference being sponsored here by the Urban Land Institute, are making a strong business case for going green.

Yes, building sustainable environments does cost more upfront–as much as 10% more, depending on how green you go. But the phrase used repeatedly in conference sessions is “Cost Neutral,” meaning simply that upfront costs are mitigated by downstream savings.

“Our goal is zero cost or a net reduction in operating costs,” said Brenna Walraven, an executive managing director at USAA Real Estate Co. in Irvine, CA. Walraven spoke at a session entitled “Greening Existing Buildings: Getting the Biggest Bang for the Buck.” At the end of the day, said Walraven, who is also BOMA International’s chair-elect, building green is about high performance. USAA is “not a charitable organization, and this is an important way to execute our fiduciary responsibility.”

But she warned that building green does not necessarily translate into green performance, and real estate companies need “to operate their buildings in an efficient manner.” This means staff training and implementation of such initiatives as recycling programs and the ongoing use of energy-efficient lighting.

However, “You cannot manage what you do not measure,” she said, indicating that performance measurements are key to the business case. LEED and Energy Star programs can both be used as tools to measure that performance.

“In new construction, green building is about design,” added Mychele Lord, an executive managing director at Transwestern in Dallas. “In an existing building, it has to be done by the property management team.” Lord explained that her firm’s commitment to green began with “one building, one client and one problem. A regional engineer, Dennis Thurman, reduced a client’s energy costs by 30% in answer to the California energy crisis.” Adoption throughout Transwestern’s strategy followed shortly.

Probably the clearest business case for green came from John Gattuso, SVP for Philadelphia-based Liberty Property Trust. In an earlier session, “Implementing Sustainability,” he told of Liberty’s development of the 875-foot-tall Comcast Center in Philadelphia, which he billed as possibly the country’s tallest green building. About to top out, the asset is 95% leased at a 25% premium over market rates.

In a post-presentation interview, Gattuso said that upfront costs were probably 3% over the norm. “But you can’t consider green as an add-on,” he warned. Rather, it demands a more holistic approach. “Tenants will pay a premium for the overall quality of a building like this.”

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