Posted by: BayAreaComRE | April 8, 2010

Guest Post: The Tenant Improvement Cost to Go Green

How many tenants are going green and what are their drivers. What are the real costs to build LEED CI projects. BCCI Construction Company, a well respected builder in the industry, provided this guest post.  Alex Spilger, LEED®AP manages BCCI’s LEED consulting services. He also teaches LEED workshops through the USGBC, AIA and a LEED Project Management course at UC Berkeley Extension. Bill Groth, EVP and principal, is BCCI’s key spokesperson and media contact.

As a full-service contractor, with a specialty in commercial interiors and sustainable construction, we’re often asked what percentage of our clients are interested in “going green,” or more specifically, applying for Leadership in Energy and Environmental Design (LEED) certification. We find that all of our clients are very interested in the advantages of LEED and green building. Currently we have more than 60% of our clients interested in pursuing LEED certification for their projects. While tenants generally go into a project interested in LEED, the extent that green building strategies are incorporated into projects depends largely on one factor: cost.

In order to quantify the costs of building green it is important to understand which opportunities and strategies offer the most value within LEED; simply-stated it is the most points for the least cost. In general, the green building strategies given the most weight under the LEEDv2009 Rating System relate to the following: proximity to transportation, community connectivity, indoor water savings, and energy efficiency. To illustrate, a commercial interior project located in a LEED Certified building in downtown San Francisco would automatically achieve 6 points for close proximity to public transportation, 6 points for connecting to basic services, 5 points for taking occupancy within a LEED Certified building, and potentially another 6 points if the base building restrooms achieve a 30% reduction in water usage. These factors alone equate to 23 of the 40 points needed for certification without the tenant having to accumulate any additional cost to their project.

Other credits such as Green Power (5 points) and HVAC Zoning (5 points), also offer environmental benefit and cost-effective ways to pick up points – each typically cost about $.07 cents per square foot. Other zero or low-cost strategies include preferred parking, EnergyStar appliances, lighting power reduction, construction waste diversion and low-emitting materials. Providing an indoor environment with thermal comfort, task lighting and adequate daylight and views also provide benefit without adding large costs.

Regardless of which strategies a client will pursue for their project, there is always the inevitable cost associated with managing the LEED documentation process. The good news is, even this cost has come down significantly as more LEED-savvy architects and contractors are providing this service at a fraction of the cost that a specialized LEED consultant charged in the past..

After performing a detailed cost analysis on over twenty LEED CI projects in the Bay Area, the following table summarizes the cost per square foot for various certification levels.

  • LEED Certified – $0.89/sq ft
  • LEED Silver – $0.94/sq ft
  • LEED Gold – $1.83/sq ft
  • LEED Platinum – $2.97/sq ft

So just how much does it cost to pursue LEED? While the exact answer depends on many factors, with the right location and project team, going green in a commercial interiors space can be less expensive and easier than you think.

For further information about BCCI visit: http://bcciconst.com

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Responses

  1. This is a great post. It’s awesome to see companies making environmentally friendly fitouts a priority and the cost of going green decline.

    In New York we see a lot of buildings receiving free points due to Brownfield remediation. Of course this only applies to ground-up development.

    I would also like to see payback data for each level of certification? I imagine it’s a fairly quick payoff, as companies main concern at this point seems to be cost.

    Anyway, great post and it will be nice to watch those costs to continue to decline.

    @JoeStampone1

    • The bottom line for most companies is cost. Now the environmental, moral initiative is being supplemented with the monetary argument, not over-ruled by it. Once tenants realize the cost to build green is negligible, and more landlords are amenable to funding these concessions, green build-outs will occur much more frequently.

  2. you guys lay out a good point that it is not too hard to create at least a LEED certified tenant space. With half the points already almost guaranteed, the rest can easily come from smart design.

  3. I think people are just being concerned about nature that is why they have ventured LEED designs which is a good thing. They want a design that is not only elegant but also an Eco-friendly one.


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