Retrofitting commercial buildings is quickly becoming the growth market in the building industry.
The shift from building new commercial spaces was bound to turn from erecting sparkling new mega-buildings on greenfields to retrofitting run-down but still valuable older buildings in good locations close to transportation or other amenities.
No one knows this better than the U.S. Green Building Council (USGBC). Its LEED green building certification is often called upon to rate these buildings. To date, more than 40,000 projects participate in the commercial and institutional rating systems of USGBC, which represents 7.9 billion square feet of construction space.
Ashley Katz, communications manager for USGBC notes that many of these commercial ratings are for existing buildings. “LEED for Existing Buildings: Operations & Maintenance has seen explosive growth since 2008. More certifications are awarded under [the existing buildings program] on a square-footage basis than any other LEED rating system. And this is important because existing buildings make up the vast majority of the U.S. building stock.”
As a result of this growth, LEED projects are predominately existing buildings that have received certification based on verified energy performance. “We believe that the rapid uptake of this tool signals that the market is becoming increasingly aware of energy performance and is ready to move further toward even higher levels of performance,” Katz says.
USGBC’s experience is backed up by research. The McKinsey & Company report, “Unlocking Energy Efficiency in the U.S. Economy,” which addresses reducing U.S. greenhouse gas emissions, states that existing buildings will make money and will meet 85% of our new energy demand through 2030.
And the 2009 McGraw Hill Construction’s “SmartMarket Report” estimated that the green building retrofit and renovation market was 5%–9% by value, or a $2–$4 billion marketplace for major retrofit projects. By 2014, that share is expected to increase to 20%–30%, representing a $10–$15 billion market for major projects.
Katz points out the Adobe Systems project in Northern California as particularly representative of the retrofit commercial projects and why they are growing and will continue to grow: Adobe spent $1.4 million on 64 separate projects and received $389,000 in rebates, $1.2 million in annual savings, reported a 10-month payback, and 121% ROI.
These kinds of numbers are valuable for companies that need to see a strong ROI and must defend spending in a still-recovering economy.
Another example of a retrofit with a solid bottom line is the Armstrong World Industries’ corporate headquarters in Lancaster, Pa. Originally constructed in 1998, the glass and steel building was recently rehabbed for $138,000. Company leadership believes it will recoup that money in three years. For its outlay of money, the company got:
- waterless urinals, dual-flush toilets, and water sensors for the faucets so the company could greatly reduce its water footprint. Those changes and a fix to the humidification process reduced the annual use of water from 800,000 to 420,000 gallons
- occupancy sensors
- the purchase of 2 million kWh of wind power, which provides 75% of the project’s electricity use
- landscape with low-maintenance plants, no irrigation, and a catch basin that slows stormwater release.
Another project, the Joe Serna Jr. California EPA Headquarters Building in Sacramento, Calif., studied its investment in LEED Platinum certification and found it had increased its asset value by $12 million (for a $500,000 investment), while diverting 200+ tons of waste from the landfill and enjoying a building that was better than a third more energy efficient than California’s 1998 energy code.
The team for that project actually took on some untraditional methods, such as a vermicomposting program (worm composting), which diverts more than 10 tons of waste from landfills, and saves $10,000 annually. Plus, by eliminating garbage can liners and using reusable cloth bags in centrally located recycling bins, the headquarters saves $80,000 per year.
While success stories abound in the retrofit of existing buildings, some pundits warn of the potential “post-fossil-fuel age,” where many commercial buildings, high-rise buildings in particular, will be hard to maintain and may be abandoned for easier to maintain buildings.
In an interview with with Grist.com’s Kerry Trueman, James Howard Kuntsler, author of The Long Emergency, among many other books, warns of the impact of a capital scarce, energy-scarce future on mega-structures, which serves as a reminder that builders and owners must consider how buildings will weather an uncertain future where materials or energy might be scarce or expensive.
“The skyscraper is obsolete,” Kuntsler claims. “The main reason we’re done with skyscrapers is not because of the electric issues or heating-cooling issues per se, but because they will never be renovated! They are one-generation buildings. We will not have the capital to renovate them—and all buildings eventually require renovation. We likely won’t have the fabricated modular materials they require, either—everything from the manufactured sheet-rock to the silicon gaskets and sealers needed to keep the glass curtain walls attached.
“From now on, we need desperately to tone down our grandiosity. … Our cities have attained a scale that is inconsistent with the economic and energy realities of the future. The optimum building height, we will re-discover, is the number of stories most healthy people can comfortably walk up.”
USGBC just released its list of top ten states in the United States for LEED-certified projects in 2010.
The top LEED states per capita, including the District of Columbia:
• District of Columbia: 25.15 square feet
• Nevada: 10.92 square feet
• New Mexico: 6.35 square feet
• New Hampshire: 4.49 square feet
• Oregon: 4.07 square feet
• South Carolina: 3.19 square feet
• Washington: 3.16 square feet
• Illinois: 3.09 square feet
• Arkansas: 2.9 square feet
• Colorado: 2.85 square feet
• Minnesota: 2.77 square feet
Of the projects represented on the list, the most-common project type was commercial office and the most-common owner type was for-profit organization. The cities most represented in the list were Chicago and Washington, D.C.
Photo credit: As a certified LEED Platinum facility, Armstrong’s corporate headquarters became only the sixth existing building (and the first outside of California) to achieve LEED’s highest level of certification.
Via GreenBuilder Mag