Local Market Factors Determine Traction of Green Buildings

Increasing evidence reveals that local market factors are decisive in determining how much traction green buildings truly have. As in other parts of the real estate industry where construction and space absorption rates vary from market-to-market and change over time, there’s a wide variance in the understanding and acceptance of green buildings throughout the U.S.

For TFM‘s coverage of this topic, see “The State of Sustainability” from the archives.

This assessment comes from Corporate Realty, Design & Management Institute, which was based on a survey conducted of registrants prior to its popular educational seminar series, Turning Green into Gold™. These seminars were presented in 17 markets across the U.S. during 2005. Architects, engineers, designers, facilities managers, building owners, developers, and contractors attended these seminars to learn how to design, build and operate high performance and sustainable buildings.

Overall, 35% of those responding said “green building issues are well understood, and are a corporate objective.” However, there’s a wide disparity between markets. Los Angeles was at the top of the list at 56% while the Chicago suburbs ranked at the bottom at 5%. It’s significant to note that the 20-mile drive from the Chicago suburbs to downtown reveals a different attitude as 41% said green issues were well understood and a corporate objective.

How do the individual markets rank? Seattle at 53% is a close second to Los Angeles, followed by Washington DC (48%), Phoenix (46%), Boston (44%), Charlotte (43%), Chicago Downtown (41%), and Denver (38%). The remaining nine cities came in at 25% or less.

Over the past three years, there has been an upswing in the response to the benchmark question: How well are green building issues understood by your organization? This year, 35% said that “green building issues are well understood and are a corporate objective” which compares to 11% in 2002 when the Institute conducted the research project Measuring the Success of Green.

While the progress is encouraging,” says Alan Whitson, RPA, lead presenter in the Turning Green into Gold programs and president of Corporate Realty, Design & Management Institute. “It’s clear more education about the advantages high performance and sustainable buildings is needed, and in some markets it’s looks like a lot more education will be needed.”

“Somewhat,” is still most frequent answer to the benchmark question; at least 30% of respondents in every market responded “somewhat” with the national average sitting at 46%. This compares to 49% in the 2002 survey. Seven out of the 17 markets were above 50% on “somewhat.”

A market about to reach the tipping point is San Diego, which has some of the highest energy costs in the nation. One-quarter of seminar attendees in San Diego said green building issues were well understood and a corporate objective. A third of the attendees said “green building issues were well understood, but not a corporate objective.” Another third answered “somewhat.” Only 7% said “not at all”.

A sign of how much progress has been made is those answering “not at all” dropped to 5% among 2005 seminar attendees compared to 14% from the 2002 survey. Half the markets surveyed in 2005 were at 5% or lower in the “not at all” category. The Chicago suburbs were the highest at 11%.

Ranking by “Green building issues are well understood and are a corporate objective.” Charlotte and Minneapolis tied for sixth place. Raleigh, Philadelphia, Columbus, and Atlanta tied for 11th. The survey encompasses only markets where the Turning Green into Gold™ seminar was held in 2005.