Colorado Real Estate Journal - December 3, 2014
Everyone wins with the new Commercial Green Building Code and Executive Order 13514’s 50% reusability standards coming for commercial buildings and for federally owned and leased buildings. Environmentalists will see buildings reused instead of dumped in the landfill. Building owners, according to a Case Study by Turner Construction, save $110 per lineal foot over demolition cost when remodeling. New construction will cut time, labor and materials. The IRS even allows tax benefits equivalent to $3 to $10 per sf of floor space. Investors add 8.1% ROE to the building. Green Zip is a technology advancement so major that it effects and benefits the whole industry from the architect to installer. The “Game Changer for Commercial Real Estate” to quote the EVP of Hines, a Premier Developer. Green Zip is removable/ demountable drywall tape. Conventional drywall tape seals the wall and makes the interior inaccessible to changes or reuse – or what the IRS calls a Structure. The only way to change the interior structure of a building, once sealed, is demolition. Every few years, whether leased space or corporate buildings, most of the interior is demolished and sent to the landfill making room for the new tenants’ or executives’ needs. According to a case study by Turner Construction, with GZ, you can reuse most of the interior of the building because you can Deconstruct (Not Demolish) the drywall, studs, interior doors and glass, etc. and reposition it for the next use. No more overtime labor cost working nights and weekends because of the dust and noise. No more moving drywall and other components up and down the elevator and paying for disposal. No more having to buy all new parts.
According to the study, the percentage of reuse depends on how experienced the crew is. At first, the crew produced 75% reuse of the Gypsum Panels (nearly 100% of studs, head tracks, frames, etc). As the crew gained experience, the reuse progressed to 85% and excelled at 95%. A 4-minute video made for the IRS of the demounting process is at www.dtaxbenefits.com/ green-zip.html. The Turner Study is downloadable on the same webpage. According to the study, the savings for reuse verses demolition was $110.19 a lineal foot for the first attempt of 75% reuse. As Hines said “the Game Changer in Commercial Real Estate.” Savings can reach $300 to $500 per lineal foot, depending on executives’ salaries. And I know I just raised some eyebrows. Another study, done by McGladrey Accounting, references facility managers who have other tenants on the same floor or corporate offices that have executives working on the same floor, usually are relocated because of the dust and noise of demolition. With GZ, all the executives hear is the distant sound of reversing drills taking apart the structures, reducing or eliminating the need to relocate anyone. We have covered facility managers/corporate reuse cost savings. In fact Barry Lynch, IFMA Fellow in his class on Leadership and Strategies at its National Convention, showed Green Zip to be the “New Normal “ for Management Strategies. Time schedules are reduced with self-adhesive GZ compared with conventional drywall tape. There is no need to wait the 4 hours to 2 days drying time for the first mud coat needed with conventional drywall tape. Plus, the second person needed with conventional tape to smooth out the bubbles produced with the auto taping tool is now, with GZ, applying the top coat of quick-set mud, accelerating installation time. I was with a major contractor this week and he said GZ might be part of the answer to the construction labor shortage. If Green Zip can accelerate time tables to complete the job, they might be able to do more jobs because at present they don’t have enough workers and have to put jobs off. Besides the reusability, time and labor savings above, tax benefits is another area that makes GZ affordable and profitable for the building owner. McGladrey says the tax benefits are equivalent to saving $3 to $10 per sf in floor space. Real Estate review says GZ adds 8.1% ROE. LEED Study says GZ diverts 70% from landfill/GHG. The next part of the “whole” industry I mentioned is the architects. Frank Little, the Green Zip inventor, a former top Gensler Architect who taught Construction Technology at Texas A&M, can help architect designs achieve the most reusability and tax benefits for each building. For one client, adjusting the design changed tax benefits alone from $3 million to $10 million for the same building! GZ provides all the tape needed for the whole building to maximize reusability but only charges an install license fee of $14 to $18 per lineal foot of GZ Partition (NLB wall). For every $1 of license fee there is $5 to $10 in tax benefits alone. One Fortune 50 client received $170,000 in tax benefits per floor for $24,500 per floor license.