Construction Industry Keeps Pace
With Office Owners' Green Growth

by Don Talend

Green building is no longer considered a value-added concept in the Midwest. It has become mainstream in a surprisingly short period.

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The driving force behind this shift is a market led by developers who are sensitive to utility costs and have an eye for return on investment and employees increasingly guided by social consciousness.

The latest example of sustainability reaching the mainstream is the $63 million, 300,000-sq-ft world headquarters that Manpower Inc., a temporary employment services firm, is building in Milwaukee.

"Manpower is a very socially conscious organization and wanted to reflect the diversity of the city," says Gary Grunau, regional manager in the Milwaukee office of Providence, R.I.-based Gilbane Construction Co.

A key sustainable feature is indoor air quality, a LEED criterion. The ventilation system will bring in about twice the outside air that a conventional building would.

"It's a healthier building and in today's recruiting environment, which is Manpower's area, it's advantageous to have a healthy building," Grunau adds.

The LEED silver precertified building will also feature under-floor air-distribution systems, daylighting, water-use reduction, water-efficient landscaping and low-VOC-emitting materials on the interior. The project will maximize construction materials recycling with 10 percent of construction materials by weight to be recycled and 75 percent of construction waste to be recycled.

Demand for Sustainability

The difference in demand for sustainability in the market today compared with just a few years ago is striking, says Michael Kaufman, principal of Chicago-based Goettsch Partners Inc., a design firm.

Goettsch designed the 111 S. Wacker Drive tower in Chicago, which earned in 2006 the first-ever LEED gold rating for its core and shell by the U.S. Green Building Council.

Kaufman says the building represents a milestone in Goettsch's incorporation of sustainability in office design, not to mention the market's attitude toward sustainability.

"They are responding, quite honestly, to market pressures," Kaufman says of developers. "As little as six months or a year ago, owners were not as concerned about sustainability."

Kaufman adds that developers are responding to good old American competition, generated by tenants' demand for sustainability.

"They are looking at a future tenant, and what they're seeing is that more and more tenants are interested in seeing, perhaps for public relations reasons, a sustainable building," he says.

"But I think that more and more tenants are also realizing that sustainable buildings will offer them a lower, long-term cost of occupancy. So tenants who need space for a 200,000-sq-ft law firm are saying, 'I want to be in a sustainable building because my young attorneys are asking for it, they're more environmentally conscious and I believe that a sustainable building costs less to operate.'"

Developers are benefiting from higher leasing volumes for buildings with sustainable features, Kaufman says. They are also realizing higher selling prices for buildings with sustainable features.

Putting a dollar figure on the cost savings realized in a building with sustainable features vs. a conventional building is difficult.

"Until you've actually had it in operation, until you've actually tuned the system, you won't know," says Erik Pampel, senior manager at Chicago-based financial services firm Mesirow Financial Real Estate Inc. "It takes analysis from the people who run the systems on how to adjust things and tune things.
It gets a little complicated with utility rates going up, as well."

Core and Shell, Tenant Issues

Goettsch focuses on the building core and shell where the owner can realize maximum economic return at minimal cost.

Kaufman points out that adding a slight tint and coating and designing a continuous glass shell minimizes air and water infiltration while reducing demand on the building's HVAC system. This approach was a key to 111 S. Wacker attaining its LEED rating, he says.

The revised LEED rating system is a boon to owners of existing buildings, as significant energy savings and a LEED rating are possible in the new CS (core and shell) rating module, he adds.

The CS module was developed by the USGBC in 2006 to give developers the opportunity to achieve a LEED rating in situations where tenants are required to incorporate sustainable elements on their own-elements over which the developer normally has little or no control. These include interior space layout, lighting and air distribution.

The developer can also incorporate sustainable features that indirectly benefit the tenant by working in conjunction with the LEED Commercial Interiors module.

In the case of 111 S. Wacker, Goettsch Partners designed the building to have a green roof consisting of a waterproof membrane and several inches of bedding material and hardy green landscaping. These elements reduce sun gain, and tenants can distribute their heating and cooling to optimize energy use, facilitated by the building exterior.

Mesirow's Pampel agrees that focusing on an office building's mechanical systems is a way to gain maximum impact from sustainable design. Savings here are particularly important in Chicago, where electricity rates increased an average of 22% to 55% after a state-mandated rate freeze expired on Jan. 1.

"Some of the biggest [LEED] points you will see are in mechanical systems," Pampel says. "What this will allow you to do is have tremendous savings in operating costs, but at the same time you're saving a ton of energy in doing that. The best part is those savings are passed on to the tenants out there looking for space."

Another key aspect of LEED ratings that provides an economic benefit is the indoor environmental quality criterion, Pampel says.

Noting that meeting indoor air-quality standards are minimal requirements for attaining LEED ratings for commercial interiors, he says, "You think about the value of having a work environment that people want to come to, they're excited to come to, there's a value to that. It does really help business in general because people are going to want to be there."

Pampel adds that other sustainability features of office buildings to focus on to gain LEED points include green roofs, access to public transportation and accommodation of bicycles, construction waste recycling and use of renewable energy sources, such as solar or wind power.

Sustainable 353 N. Clark Building

Sustainability will be a major part of Mesirow Financial's 45-story office building under construction at 353 N. Clark St. in Chicago, which will be the headquarters of Mesirow and law firm Jenner & Block.

The structure has received a LEED-CS silver precertification for designs such as a main green roof and the bustle and use of 75 percent recycled materials, among other sustainable features.

The building was also admitted into the Department of Construction and Permits' Green Permit Program, which expedites permit review based upon the number of sustainability features.

Kaufman and Pampel say that other Midwestern cities besides Chicago have become active sustainable office markets.

"We've done some work in the suburbs of Milwaukee; they're not quite at the same level as Chicago, but pretty close," Kaufman adds.

The Alberici Corp. headquarters in St. Louis received a LEED platinum rating in 2005. Grand Rapids, Mich., has been recognized by the U.S. Green Building Council for having the most LEED-certified buildings per capita in the nation.

"I would be surprised if, in five years, every building was not done to a sustainable level-maybe even less time than that," Kaufman says. "I think it's just going to become part of our practice, just as doing a functional layout is part of our practice."

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