When the Steelcase Wood Furniture Manufacturing Plant in Caledonia, Mich., was certified LEED Silver in 2001, it was the first industrial facility to achieve that designation from the U.S. Green Building Council (USGBC).
Nearly 10 years later, after an explosion of green building, the total number of LEED-certified projects has jumped to more than 7,300. Yet industrial projects comprise a relatively small number of this total. In December, the USGBC reported only 198 so far. The lag can be attributed to a number of factors, such as the economics of speculative development, the typically higher energy demands of these facilities, a lack of industrial-specific LEED guidelines, and the diminished industrial construction starts of the past few years.
“Initially, the commercial real estate industry didn’t see LEED as relevant to this product type,” says Ruth Brajevich, the chief marketing officer for Irvine, Calif.–based Ware Malcomb. Brajevich’s firm has completed industrial LEED projects for real estate investment trusts (REITs) and private equity firms.
The coexistence of green and industrial has been considered the realm of owner-users, who can most benefit from reduced operating costs, increased building value, and LEED cachet, explains Eugene Page, a senior managing director in the Los Angeles office of real estate firm Charles Dunn Co. But with the USGBC now reporting 814 LEED-registered industrial projects, and global industrial REITs such as ProLogis and AMB Property Corp. implementing green building initiatives, the rules for green industrial are changing.
“We’re seeing that nontraditional building types can fit well with sustainable initiatives,” says Edmund Klimek, AIA, a partner at KSS Architects in Princeton, N.J.
Thomas J. Bisacquino is the president and CEO of the Washington, D.C.based NAIOP, whose members are involved in the development and ownership of industrial, office, and mixed-use properties throughout North America. To gauge its members’ commitment to sustainable practices, NAIOP assembled a “green task force” in 2007. “It was widely agreed that if you’re going to put energy-saving technology or methodology into a building, you want a three-year or less return on investment [ROI],” Bisacquino says, adding that the majority of members support energy-efficiency measures to the extent that the tenant is willing to pay for it. “The tenant is driving the bus on this,” he says.
Klimek, who estimates that more than 80 percent of KSS Architects’ industrial clients are expressing interest in sustainable design, doesn’t consider the focus on ROI as an obstacle to green industrial development. Among KSS’ recent green industrial projects is a build-to-suit, 255,000-square-foot LEED Silver distribution center for Empire Merchants North in Coxsackie, N.Y., and a new sales and distribution center in South Brunswick, N.J., for the Coca-Cola Co. that is being developed by Forsgate Industrial Partners.
“Some building owners have a clear 20-year plan, others want a return in as little as five years. We can do it and be sustainable. These are not mutually exclusive things by any stretch of the imagination,” Klimek says.
Owens Corning’s Brian King, who is products and program director for foam insulation, agrees that economics drive development decisions. The company recently completed a 45,000-square-foot manufacturing facility in Gresham, Ore., that was awarded LEED Gold. For Owens Corning, King says, the nature of its business—the plant makes Greenguard-certified Foamular insulation—contributed to the decision to go green. “The fact that we make a product that goes into LEED projects definitely played a role in … us building a LEED facility,” King says.
Building a better LEED
Ware Malcomb reports that it’s common for industrial clients to explore LEED as an option and even incorporate the majority of the criteria, but not pursue final certification. Though associated costs are often cited as the reason, Bisacquino argues that the existing standards don’t adequately reflect the industry. “Our members say LEED is too prescriptive versus being performance-based,” he says.
Erik Sueberkrop, FAIA, a principal in the San Francisco office of Studios Architecture, was on the design team for a new manufacturing and office facility in Fremont, Calif., for Solyndra, a company that designs and manufactures solar photovoltaic systems. Working with design engineers CH2M Hill, Studios approached the office and industrial components separately when planning the two-building, 620-000-square-foot project.
Though the Solyndra manufacturing facility has natural daylighting, a photovoltaic array, a light-reflective roof, and bioswales to collect and filter stormwater, its high energy demands led to the decision to seek LEED Gold only for the office. “It was determined … [LEED] was not the appropriate measuring stick for this typology of building,” Sueberkrop says.
When the USGBC ends the second public comment period for its proposed LEED 2012 in August 2011, it’s expected to have the framework for the first rating system for Core & Shell (CS) and New Construction (NC) that considers warehouse and distribution centers. Among other revisions, the proposed rating system would add new credits to address water metering and reporting, building-level energy metering, and commissioning and verification issues. Additionally, bicycle racks, which Bisacquino points out currently earn credits even when a project’s location render them irrelevant, would only garner points part of a larger bicycle network strategy.
Upfront costs, long-term savings
Despite what some call prescriptive LEED guidelines, industrial owners and developers have successfully achieved—and even exceeded—their goals.
In 2008, AMB opened Building 100 at Morgan Business Center in Bloomingdale, Ga. Though originally planned as the first speculative LEED Silver facility in the Southeast, the building ultimately netted LEED-CS Gold. According to the USGBC, the 347,000-square-foot project boasts a 32 percent reduction in energy use and a water savings of 2 million gallons per year, compared with a conventional structure.
Similarly, when Owens Corning set out to build its Foamular facility, it set its sights on LEED-NC Silver. King says the implementation of a number of sustainable site and water-efficiency strategies—minimizing outdoor light pollution and incorporating a bioswale, among them—helped it accumulate enough points to achieve a Gold rating.
Whether or not a project seeks LEED, design features such as daylighting, efficient lighting, reflective roofing, and indoor air quality measures, including enhanced HVAC systems, can translate into significant energy savings and reduced operating costs.
Working with ProLogis at its Park Duck Creek facility in Stockton, Calif., Ware Malcomb completed a 780,000-square-foot distribution center for Sears that earned LEED Silver certification. Employing a comprehensive energy-efficient lighting system and extensive daylighting strategies helped the project obtain nine of those credits in the Indoor Environmental Quality category. The project is expected to save Sears approximately $400,000 in lighting costs annually, according to a Ware Malcomb analysis.
Because lighting is the largest electrical load in its warehouse facilities—consuming as much as 70 percent of a facility’s energy—in 2006, ProLogis formulated a lighting retrofit and standardization program for its portfolio. The REIT reports that the program has resulted in a reduction in energy use by as much as 75 percent through the use of T5 and T8 fluorescent lights, coupled with sensors and photoelectric cells.
Though Bisacquino says he thinks lighting retrofits make a tremendous amount of sense, he warns that some NAIOP members are uneasy about making an investment in light-emitting diodes (LEDs) or similar technologies that have experienced rapid cost reductions over a short period of time.
Site, supply chain, and building
Because of industrial real estate’s interdependent relationship with goods and their movement, Klimek says these projects need to be approached with a perspective that extends beyond the physical components of the buildings. “The industrial sector’s focus on moving goods implies a host of sustainability issues that go beyond just the impact of the buildings themselves,” Klimek says.
Factoring the supply chain into a project’s site selection has the potential to significantly minimize an industrial project’s environmental impact. By locating its Foamular plant near its growing Northwest customer base, for example, Owens Corning expects to prevent emissions of at least 500 tons of carbon dioxide annually that would have resulted from ground transportation.
Klimek also points to urban infill sites, particularly those that retain previously built infrastructure. AMB research on industrial site-selection strategies suggests that infill locations not only are more sustainable, but provide owners with superior occupancy, rental growth and returns, and efficient supply chain operations.
In 2009, ProLogis formed a renewable energy group to focus on renewable energy projects globally. The industrial developer is looking for opportunities to deploy large-scale distributed solar on its more than 450 million square feet of rooftops worldwide. By renting its roof space to utilities and investors, ProLogis has been able to send energy directly back into the grid.
“Industrial buildings are becoming a source for energy rather than a drain,” Klimek says. “In the long run, that’s where industrial can make a big difference in terms of sustainability.”
Correction, Jan. 31, 2011: As originally published, the caption for the first image in the slide show, of the ReCAP book storage facility, misstated the building's owner. We regret the error.