Area Development
With mounting environmental concerns over energy use, building "green" is more important than ever. It's key to keep in mind, though, that while green building is gaining acceptance, it's still a relatively young movement. At present, green buildings account for approximately 10 to 15 percent of the overall new construction market. But that is changing - rapidly.

Judging by the explosive growth of the U.S. Green Building Council (USGBC), which has seen its membership roster increase from 500 members three years ago to more than 12,000 today, green development is well on its way to being a mainstream business practice. The USGBC created a structured certification program called Leadership in Energy and Environmental Design (LEED), which is making the process of building green even more standardized. The mainstreaming of green development has been recognized as a smart long-term investment by developers as well. They are responding to companies' demands for facilities that are more energy efficient, and are building facilities with materials that are nonpolluting, recyclable, and biodegradable.

Who's Going Green?

The green movement has gained considerable momentum over the past several years. Following the lead of the USGBC and its LEED rating system, which has been widely embraced around the globe as the "green standard," numerous public- and private-sector interests have moved to adopt green building policies and clean energy standards. Some of the public entities include the California cities of Los Angeles, San Diego, and San Francisco; the cities of Seattle, Washington, and Portland, Oregon; the U.S. Department of the Navy; and the states of Oregon, New York, and Maryland.

Nationally, corporations have implemented sustainability concepts into their manufacturing, packaging, and logistics processes. Sustainable buildings are a natural extension of this mindset, allowing corporations to live and work in building environments that are constructed with an eye on conserving resources and using materials that are neutral to the environment. In addition, utilizing recycled, reclaimed, or salvaged materials can lessen the burden on landfills by reducing the need for dumping. Developing a green building means exhibiting a commitment not only to the quality of the building itself and the customers' experience upon leasing, but also to being a good environmental corporate citizen within the community. Among the corporations that have built green facilities in recent years are Toyota, Southern California Gas Company, Steelcase, Herman Miller, Johnson Controls, Interface, IBM, PNC Financial Services, and Ford Motor Company.

Green Benefits
Green buildings have numerous advantages, both tangible and intangible. Benefits include a reduction in energy costs and potentially a healthier, more productive work force. Sustainable design can offer significant energy and water use reduction, air quality improvement, and increased material efficiency.

As the green building movement takes shape, expect to see typical grass berms at industrial sites give way to more sophisticated and complex green features. One such component has been bioswales, which have water-retaining capacities, or French drains, which reduce the amount of water discharged into sewer systems. Modern green buildings will have carpets produced with recycled materials. Construction practices involving the storage and disposal of materials are being adjusted to be more environmentally sound. More energy efficient mechanical systems will find their way into buildings, as will more natural light, and the exterior landscaping will become more drought tolerant.

Money Matters
Justifying green on a cost analysis is a complex process to be sure. Bottom-line results must be carefully weighed to guard against pursing a green program that is marketing hype or an empty fad. There are a number of clear economic advantages to sustainable building, including immediate savings in the area of utility costs. LEED certification, which is currently the most accepted method of judging the sustainability of a building, requires buildings be commissioned as part of the process, which typically is given approximately six months following completion of a building. Commissioning ensures that building systems work the way they were designed and built, and are as efficient as promised. Buildings with efficient layouts can reduce the cost of building materials and construction waste. Additionally, by utilizing efficient heating, ventilating, and air conditioning (HVAC) equipment, the building relies more on passive strategies for heating and cooling, therefore cutting the cost of equipment. Financial incentives from local utility companies are also possible for buildings that utilize sustainable design strategies.

The economic benefits of sustainable design can be realized in the short term and long term. Sustainable design can lessen the demand for water and energy resources and provide cleaner air for cities. There are often higher long-term tenant retention rates due to enhanced user satisfaction, health, comfort, and productivity. The benefits associated with a comfortable staff are significant, as a building will become more desirable if it can provide a higher level of environmental quality - thermal, lighting, indoor air quality, etc. - for its occupants.

Although the barriers to developing green buildings are becoming lower every year, there are few pursing LEED certification as a strategic long-term strategy. Developers that adopt a long view may realize significant return on investment (ROI) over time, simply because the customers are increasingly demanding green space to satisfy their need and desire to be more carbon neutral. The commitment to green for a developer must be resolute because it is a costly and time-consuming process to ensure that green construction practices are utilized. Additionally, a developer must oversee a host of LEED consultants and manage the certifications to ensure a building achieves the level of certification desired.

Levels of LEED
The USGBC program provides multiple levels of LEED certification that developers can adopt for a specific building. The LEED for New Construction Rating System is designed to guide and distinguish high-performance commercial projects. LEED is a point-based system in which projects earn LEED points for satisfying specific green building criteria. Within each of the six LEED credit categories, projects must satisfy particular prerequisites and earn points. The six categories are: • Sustainable Sites;
• Water Efficiency;
• Energy & Atmosphere;
• Materials & Resources
• Indoor Environmental Quality; and
• Innovation in Design (projects can earn ID points for green building innovations).

The number of points the project earns determines the level of LEED certification the project receives. LEED certification is available in four progressive levels: Certified, Silver, Gold and Platinum.

Recently, Watson Land Company recognized the importance of LEED and began formulating a development program to accommodate environmentally sustainable and responsible building practices. Not only was going green good for the long-term health of the planet, but input from the company's customers and potential tenants confirmed there was demand for a new type of work environment - one that cast a smaller carbon footprint. As Watson Land Company's green effort began taking shape in the late 1990s, it created the Legacy Building Series program, featuring a new generation of modern industrial buildings that entail significant flexibility, natural light, and interior lighting systems that adjust to external conditions.

A prime example of how these green industrial developments are coming to fruition is at Watson Commerce Center Chino, a 1.3 million-square-foot master-planned site in Chino, California. The development encompasses four buildings ranging in size from 265,000 square feet to 410,000 square feet that, upon completion in early 2008, are expected to be the first speculative LEED-certified industrial buildings. The company is applying for silver-level LEED certification for the buildings.

Here to Stay
The greener industrial facility concept has been validated by customer demand. Nature's Best, the largest privately owned wholesaler-distributor of health and natural food products in its industry, has committed to a 410,000-square-foot lease at the Chino center - as a distributor of natural food products, a green building is aligned closely to its core values. Other Fortune 500 companies cite being in a green facility as an important way to demonstrate a commitment to environmental sustainability.

As corporations seek to achieve greater levels of social responsibility and environmental sustainability, green development is truly becoming a mainstream business practice. Leaders in the development community certainly can expect green building to translate into an increased percentage of their portfolio holdings, and this should begin to drive a larger part of profits in the coming years.

Lance Ryan is vice president of marketing and leasing for Carson, California-based Watson Land Company, a member of the U.S. Green Building Council (USGBC) and among the largest developers of master planned industrial centers in Southern California. Visit the company's website,