Sustainability for the Commercial Realtor®:
NAR's Green Designation Elective

REALTORS® Commercial Alliance’s First Annual

Developer’s Day Event

September 14, 2009 at Express Event Center

8514 NW Expressway / Oklahoma City, OK

 

2009 Sponsors:

 

 

www.dobsonmortgage.com

www.firstam.com

www.okcabstract.com

www.waterfordproperties.org

Information Since the Seminar:

On November 1, 2009, the Formation of Superior Street Capitol (http://www.superiorstcapital.com)  was announced by Jeff Rothbart, an attorney who is LEED-AP for New Construction, and holds Series 22 and 63 licenses as a NASD registered representative.  Superior Street Capitol will specialize in refinancing distressed Tenancy In Common (“TIC”) investments, as well as helping building owners achieve financing for  LEED certification

Journal of Sustainability Real Estate (www.josre.org).  Does Green Payoff? (By Norm Miller, Jay Spivey and Andy Florance1: Draft: Date: July 8, 2008) a comparison data on energy star and LEED certified buildings versus non-energy star or Non-Leed certified office property from the entire US using CoStar data base  

·          Cost increases for office and school buildings: 0.6% for LEED certification, 1.9% for silver, 2.2% for gold, and 6.8% for platinum

·          effective buildings could increase tenant productivity by at least 30%.

·          Energy Star Rated Buildings vs Non-rated office Buildings:

o      Operating costs $0.50 / sf less

o      Cap Rates on Resale .55 basis points less, adjusted for size, location age, and time of sale (mean price per sf: 10% higher for LEED, 5.76% higher for Energy Star)

The City of Oklahoma City’s Sustainability Manager: Autumn Radle

Wal-Mart is embracing sustainability. The company announced that by October 1, 2009, top-tier suppliers will be asked 15 questions about their sustainable practices. In July, Matt Kistler, Wal-Mart's senior vice president for sustainability, said that the questions will be used in the vendor evaluation process; "It will be a way of making a final decision beyond cost."

Wal-Mart is providing initial funding for a worldwide Sustainability Index Consortium, which will eventually be administered by Arizona State University and the University of Arkansas. Recognizing that their customers want products that are more efficient, last longer and perform better, the Sustainability Index will be a public database that will contain information of the the product’s entire lifecycle. Ultimately the Index will provide customers with information they need to assess products’ sustainability.

Business Practices that Wal-Mart mandates tend to become "best practices" for businesses in general

 

 

 

 

 

The First Year’s Event was the Pre-Summit Commercial Developers Seminar in Conjunction with:

 

Those attending the first year’s event learned out about the benefits of going Green, and What is a Green Building?

 

 

Guest Speakers Included:

  • Gary Brooks – Cornerstone Development Groups - who said:
    “Tenants are the drivers for the Green (or Sustainability) movement in buildings; either as the owners or as the leases. Tenants committed to the Green Philosophy will pay the added costs for new construction as well as require property managers to maintain buildings in a sustainable way. The problem is that, in most markets, a developer will get paid $0 additional dollars to develop a spec green building. Typically only government agencies and large national tenants are paying for Green. And, unless an appraiser will value a building for its sustainable features, a banker will not provide a loan for the additional costs of going green.” Brooks said that it was his best guess that obtaining a LEED certification for a building would add about 4% to the cost of a building in the form of better quality sustainable materials, additional administrative costs and documentation (for both contractor and sub-contractors) and filing fees. Brooks concluded by suggesting that we were in the Early Adopter phase of implementing sustainable innovations. At some point in the future we will enter the Majority phases when everyone will expect buildings to be constructed using sustainable principles. For now, he will be a few steps ahead of his competition, ready to be the "go-to" guy when that tipping point day arrives.

 

  • Dwayne Robinett, AIA, LEED AP – Rees Associates discussed "Sustainability from an Architect's Perspective" Dwayne discussed the history of the sustainability movement as well how "rethinking" the way we do business can provide significant economic benefits. Review Dwayne's PowerPoint Presentation (17 mb file).

 

  • Derek Sparks , Field Representative for Congresswoman Mary Fallin, 5th District provided a status update on the building and lighting energy portions of the Waxman/Markey Cap & Trade bill before Congress. The House version would mandate significant energy reductions from lighting, and also require that residential properties sold must meet minimum energy consumption requirements with energy certificates filed at the court house at time of sale -- seller responsible for any retrofits needed to meet minimum energy requirements. The Senate has passed a section of the bill, sponsored by the NAR, that removes the energy audit and filing requirements.

 

·         Bart Binning, Ed.D., Broker/Associate – Prudential Alliance Realty who concluded that tenants and building owners are starting to see that going green is to their economic benefit – their employees are more productive in sustainable buildings, their sales are greater in green retail spaces, and as a side line they are helping the environment. In classifying Class A buildings, the market is starting to demand these buildings be Green. The issues we see are a result of us being in the Early Adopter phase: because there are so few EnergyStar Labeled or LEED Certified buildings, there is a lack of comparable buildings to be used in valuation. The Appraisal Institute Recommends that Discounted Cash Flow Analysis be used for the valuation of Sustainable Property. And in today's economic environment, most banks are only loaning based on appraiser valuations which tend not to include additional credits for sustainability. However, in spite of issues, “The bottom line is that embracing sustainable concepts significantly increases the tenant bottom line. And this profit benefit, more than any government regulation or tax incentive, means that going green is not an environmental fad or a bubble. Green is hear to stay.”  

·         Reference Links for CE Course

·         Energy Star Labeled and LEED Rated Buildings in Oklahoma

·         Local Green Insurance Providers

·         Financing Green Projects

·         Green Tax Incentives

·         GSA and other Green Issues

·         ASHRAE 90 Standard overview & Building EQ

·         Energy Star Small Business - New Construction (word doc)

 

Those attending the seminar were approved for Continuing Education Credit:

  • 6 hours “Hot Topic” from Oklahoma Real Estate Commission
  • 6 hours from Oklahoma Appraisal Board
  • 6 hours toward NAR’s Green Designation: Elective for Commercial REALTORS®

 

What participants said during the Seminar:

·         Judy Crews, Director of Property Management for Baker First Commercial Real Estate Services by upgrading T-12 florescent lights to energy efficient T-8 lights, there can easily be a 30% reduction in electrical usage, and the load on the air conditioning system is also reduced.

  • John Meek, President of First Commercial Management, Chair-elect of the local chapter of the Building Owner and Managers Association asked the question “Since it costs more to operate a building under sustainable guidelines, what incentives are there for building managers to continue to operate buildings to maintain the sustainable benefits?" After a discussion we were left with the thought that as tenants become more aware of the benefits they obtain from operating sustainable buildings, tenants will become more insistent that the buildings the lease be Green buildings. But without that tenant buy-in, the building's operations may deteriorate over time.

 

Special Thanks to:

 

 

RCA Event Coordinator: Linda Dobson, NAI Sullivan Group

Linda@naisullivangroup.com / (405) 840-0600

 

Curriculum & Workbooks Developed for:

Commercial REALTOR® Elective for the

Green Designation” is by the

Green REsources Council of the

National Association of REALTORS®

 

Oklahoma City Metropolitan Association of REALTORS®

REALTORS® Commercial Alliance division

3131 NW Expressway

Oklahoma City, OK 73112

www.rcagateway.com

For Further Information Contact:

Kim Bradley, RCA Liaison

Phone: (405) 840-1493

Fax: (405) 840-9270

kbradley@okcmar.org

 

RCA Technology Chair: Marc Weinmeister -- CommercialOKC


Resources for Developers  |  Schedule & Course Objectives