By Jeff Swiatek, The Indianapolis Star
Dec. 12--Getting certified as a green office building isn't easy.
The Boston real estate company Franklin Street Properties found that out when it applied for LEED certification on its One and Two River Crossing buildings on Indianapolis' Northeastside.
The yearlong process included handing out recycling containers to every tenant, switching hundreds of older light bulbs for energy-efficient models, installing water-stingy plumbing features, and monitoring the garbage for 90 days to make sure tenants weren't throwing out stuff they should have recycled.
Luckily for Franklin, it didn't have to replace the buildings' heating and cooling systems. Thanks to the foresight of developer PK Partners of Indianapolis, a geothermal heating and cooling system was put in when the buildings were built in 1999 and 2000. The system uses 35 miles of piping that runs under the water of an adjacent lake.
On Thursday, the tedious work paid off with an afternoon reception for tenants at which the buildings were granted their LEED Silver certification from the U.S. Green Building Council.
They are among the first existing office buildings in Indiana to get LEED certification for operations and maintenance, said Mindy Hanni, president of Urban Design, the Indianapolis architectural firm that helped do the LEED retrofit.
LEED, which stands for Leadership in Energy and Environmental Design, is the most widely acknowledged certification for energy-efficient green buildings. In Indiana, only 25 buildings had LEED certification as of early 2009. Almost half are hospital- or university-owned.
Franklin, a real estate investment trust that owns or manages 44 properties across the country, decided to go for the green designation to realize the cost savings the changes would bring, as well as to use LEED status to market its buildings, said Patti McMullen, a vice president and asset manager for Franklin, which bought the two buildings in 2005.
McMullen wouldn't divulge the cost of the certification but said it was a "reasonable amount" that's already been paid back through savings in lower water and trash bills. Recycling by tenants has cut the buildings' trash costs in half, she said.
Building chief engineer Jeff Seaton of Gibraltar Management, who hung out on the edges of the crowd that was nibbling pastries and other sweets, didn't hesitate when asked about the hardest part of the retrofit: the trash audit.
"I had to go through garbage bag by garbage bag," he said. "It wasn't much fun."
The twin buildings, in the Keystone at the Crossing complex along I-465, are popular with tenants. They're 95 percent full and sport rents of $22.50 a square foot, 16 percent higher than the going rate of $19.45 for suburban class A space, said Dan Richardson, a senior vice president for CB Richard Ellis, which handles leasing in the buildings.
Getting LEED certification should make the buildings even more marketable, he said.
"Tenants are putting more emphasis" on being in green buildings, he said. The owner of a LEED-certified building is increasingly "seen as a good landlord and willing to invest in other things" that are tenant-friendly, Richardson said.
A recent CB Richard Ellis study, done through the University of San Diego's Burnham-Moores Center for Real Estate, found that green office buildings enjoy 3.5 percent lower vacancy rates and command 13 percent higher rental rates than the overall market.
In addition, tenants of green buildings who responded to the study's poll reported an average of nearly three fewer employee sick days per year compared with when they were in nongreen space. That could be due to the use of green cleaning materials that aren't as caustic or allergenic.
Energy-efficient green office buildings typically bring a savings of 50 cents a square foot, or 5.5 percent to 7 percent, in operating expenses, which run $7 to $9 a square foot for suburban Indianapolis office buildings, said John Vandenbark, a CB Richard Ellis office broker.
"It's a big deal," he said of the savings. "In a (rental) market that's tough, it's one more arrow in your quiver" to be able to market a green building.
Heather Mann, firm administrator for Somerset CPAs, a longtime tenant in the One River Crossing building, said the yearlong retrofit barely was noticeable to tenants. She said her 120-employee firm hopes to reap savings in utility and other operating payments from the changes. And she's hoping the firm can use its location in a LEED-certified building as a recruiting draw when hiring new employees.
"You want to be in a healthy environment. A lot of the younger generation is concerned about the environment, being green, things like that," she said.
Call Star reporter Jeff Swiatek at (317) 444-6483.
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