CREJ - Property Management Quarterly - May 2015
Every week it seems another Colorado building is recognized for LEED certification. In fact, in 2014 Colorado was second in the nation for LEED green buildings, according to the U.S. Green Building Council. LEED-certified buildings use less energy and water resources, save money, reduce carbon emissions and create a healthier environment, according to the USGBC. LEED is even more on my mind after I attended the USBGC’s Rocky Mountain Green Conference in early April. One topic that came up several times throughout the event was the intangible benefits of LEED certification. In a panel about next-generation energy management, Adam Knoff from Unico Properties shared the perspective of how investors view sustainability projects, as well as the financial metrics to which investors pay attention. The tangible cost savings as they relate to a building’s operational, maintenance and administrative cost are very important, he said. However, the intangibles – increases to occupancy, increased tenant satisfaction and improved productivity, and positive reputation – are hard to show on paper. There’s not enough data to show that these intangibles are really impacting the investment, he said. In a later panel, a speaker said that while owners now recognize the benefits of certification, in large part due to a cultural shift, typically they still like to see the payback in a twoto three-year window. And while the certification can create a higher asset value and keep a building competitive, in Colorado’s hot market it’s challenging to see how much people care specifically about the certification and how it affects tenancy. In the coastal markets, properties with LEED certification can demand higher rental rates, but that hasn’t happened here yet, said Eric Weisenstein of Transwestern. I left the conference with another takeaway – when pursuing certification or recertification, it is smart to work with a consultant. Four property managers on a panel all resoundingly and repeatedly stressed this. Consultants are valuable to help navigate the required documentation and aid in a smooth, productive process. They can help determine what certifications and credits a property should plan for, and consultants have strong relationships with the certification teams. One manager said that in order to properly become certified, managers have to follow a “perfect recipe,” which consultants understand better than anyone else. I hope you’ll find this issue to be chalk full of useful information, including a sustainability highlight as well as a wide variety of other topics. As always, I must thank all those who participated in this issue. And I welcome your feedback. Michelle Z. Askeland maskeland@crej.com 303-623-1148, Ext. 104