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This summer IDI opened its first LEED-certified building, which also happened to be the largest LEED-certified building in the Southeast. Crossroads Distribution Center Building F, an 800,308-sf warehouse and distribution center outside Memphis received a silver certification from the US Green Building Council. The same month, it announced plans for the fist LEED-certified industrial building in the Tampa market, the 146,825-sf Madison Business Center Building D. And in July, IDI became the first industrial real estate developer in the Chicago market to achieve LEED certification, receiving a silver rating for the 102,936-sf Building IV at Bolingbrook Corporate Center in Bolingbrook, IL. GlobeSt.com took the occasion of the three achievements to query IDI CEO Tim Gunter, a former forestry industry professional, about the Atlanta-based REIT’s experiences with the LEED program and plans for its use in future projects.

GlobeSt.com: What is your general approach to LEED certification?

Gunter: We’re trying to focus on sustainable development, and LEED is one of the tools we use. We’re also using other things that may or may not give us LEED points. The real issue is not LEED itself but how we can build more sustainable projects. Sometimes LEED intersects with that, but sometimes it doesn’t.

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

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

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

Gunter: To get above silver, you need interior work too, and we don’t build the interior until the tenant is signed. Unless you have tenant willing to pay for additional items to get to gold or platinum, you can’t do it. We’re starting to see tenants in the marketplace who have a corporate mandate, and that’s really where you’re going to see industrial buildings going to gold or platinum. But you can’t get there without the tenant’s cooperation. Generally, all our buildings are pretty close to sliver. We’re not necessarily looking to get silver, but it works out that way. We focus on building a quality building, and often that means we end up meeting LEED requirements. But we’re tweaking and doing things a bit differently.

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

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

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

Gunter: Most of the projects we’re doing are spec, not build-to-suit. We’ve got 19 buildings in development, 6.8 million sf. Almost all of them are spec, and we expect we’ll get LEED 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 realize what it will cost, they say, we don’t really want to pay for it. Others say we absolutely need to have LEED certified buildings.

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

Gunter: I think the higher levels of LEED are going to be driven by tenant demand. We’re just starting to see the tip of that. One example would be Wal-Mart. Look at their sustainability page, and it talks about what their goals are. They figure about 80% of their environmental impact is in their supply chain, so the only way for them to have impact on sustainability is to require their suppliers to look at their impact and increase their sustainability. So what we’re seeing with Wal-Mart is 40,000 suppliers or whatever huge number being given a push. We’ve already had a tenant or two come to us and say we want to do LEED, and they tell us they’re a supplier for Wal-Mart. Companies like Amazon.com are also more environmentally sensitive.

The other way you’re going to see further LEED use is through municipal regulations. Some places are giving expedited approval for LEED buildings. And you’re going to see them start to require more LEED buildings. They’re going to write this into their codes. I’m a little concerned about this because you don’t get certification until a building is complete, so you could end up in trouble with local authorities even though you tried your best. It depends on how they write the rules.

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