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Green Marketing: Make Your Building Stand Out
Also in this report
- Green Marketing
- Clinton Helps Cities Go Green
- News Briefs
- School Earns Gold
- Green School, Teaching Tool
Commercial real estate owners who make green building investments naturally want to benefit from them — by attracting better tenants, securing longer leases, experiencing fewer vacancies, gaining a more positive public image and enjoying a competitive advantage in what is generally a commodity market.
To cash in on these benefits, however, building owners need to learn how to market their buildings to separate them from the pack. No single competitive strategy is right for every property. A company’s marketing needs to reflect its strategic vision, project management capability, available capital and corporate values.
The marketing also should reflect the reasons the building owner decided to build green in the first place. According to a McGraw-Hill Construction survey, about 70 percent of building owners build green to reduce energy costs, 60 percent want to make a positive environmental impact, and 53 percent hope to secure a competitive advantage. The task is to translate these triggers into a consistent set of marketing approaches that respond to tenant motivations.
In today’s environment, a company’s marketing must provide something remarkable just to get attention. Here are four strategies to consider:
Building owners can use green design to differentiate their buildings from ones constructed with traditional principles. The main differentiators for green building owners are successful projects, satisfied clients and tenants, LEED certification, lower operating costs, delivering green building projects on conventional budgets and competitive rents. A developer usually needs to have attained at least a few of these key variables to develop major new projects in highly competitive situations.
The degree to which a company is able to differentiate itself typically increases over the course of several green building projects. As one example, the Dockside Green project in Victoria, B.C., has committed to constructing all LEED Platinum residential and commercial buildings. This commitment has garnered favorable publicity across the U.S. and Canada.
- Become the Low-cost Owner
Given the tight budgets of many building projects and competitive rent structures in most urban areas, the ability of developers that use green technologies to compete on price is a valuable strategy. It may seem counterintuitive that a green building can be the low cost option, but by combining experience gained from previous projects, accurate product knowledge, good research, and local or state incentives, green building developers can use green to become known as an area’s low cost developer.
Low-cost advantages can have more of an impact than even branding as a way to compete in the marketplace, but most companies do not have the discipline or skill to operate in the low-cost fashion. A good example of the competitive advantage of lower cost of operations is the almost unblemished success record of Southwest Airlines, profitable every year since 1972. For Southwest, the low prices made possible by lower operating costs have become the primary brand.
In terms of buildings, an example of a focus on low-cost is a company called Workstage, which targets the corporate “build-to-suit” market. Based in Grand Rapids, Mich., Workstage aims to wring out extra costs of green buildings by standardizing every element of the design and construction process. They use interchangeable modules and like-minded architect-engineer teams for each project. Workstage’s corporate and institutional clients want green buildings, but they do not want to spend an extra penny to get this benefit.
- Target Particular Markets
Often, a developer or property manager will try to target too many clients while not focusing on the clients it really wants. Points of focus can include:
- Regional versus national markets. Developers may compete nationally by narrowing their focus to one target market, such as mixed-use urban infill, brownfield redevelopment, suburban green offices or “spec” biotech laboratories.
- Client types. A developer may take aim at smaller clients, businesses with risk-taking profiles or companies distinguished by strong cultures and values of sustainability. Identifying a company with a CEO committed to sustainability is often a huge competitive advantage.
- Building or project types, or vertical markets. Consider focusing on categories such as office buildings, public service facilities, secondary education, higher education, health care, labs, cultural centers, retail, hospitality or industrial. Building types likely to be affected in the future by higher peak-period electricity rates might be good candidates for energy-efficiency investments, particularly in states or utility service areas with significant incentives. In Oregon, for example, the state’s Business Energy Tax Credit, worth 25 percent of the initial cost of photovoltaic or energy-efficiency investments, can be passed through from a non-profit institution or government entity to a for-profit tax-paying company, on a dollar for dollar basis, making it available for all projects in the state.
- Signature green measures. These could include items such as photovoltaics or green roofs that a developer, owner or manager commits to bring into play on each building. While it can be risky for developers and designers to always bring certain technologies to their projects, it is more dangerous not to be known for anything in particular. Branding a company with specific green technology solutions for particular building types and sizes can be an effective marketing measure, allowing such companies to at least make the short list for interviews.
- Build a Brand Image
In today’s commercial world, companies must create a brand that incorporates the key differences in their product or service offerings. A developer might want to be thought of as the leading-edge property owner in terms of energy-efficiency or as the most environmentally responsible landlord. This narrows the market but sharply defines the company to buyers who value that attribute. What defines a brand in the green building marketplace?
- A brand is a story told between marketer and clients, between developer and tenant. The storytelling should focus on the features of the project, including the experience of working in the space.
- A brand sells an experience or a series of benefits to the consumer. People must be led from hearing about the value of the features to understanding how they will benefit from them.
- A brand delivers on its promises. For example, in a LEED Gold-certified apartment building, the presence of a trash room with recycling bins on each floor would demonstrate daily that the building is green. A green roof on the second story, the bamboo flooring in the kitchen, and dual-flush toilets would reinforce the notion that the building delivers on its promise to be green.
- A brand walks the talk. Consumers expect sellers to live by the values of what they are selling. A green developer should have offices in a green building. A green developer should be promoting sustainability in all its activities, not just in a particular project.
- A brand communicates its differences effectively. The average adult is bombarded with up to 2,000 commercial messages daily. Getting through the clutter with effective communications is an art. Most savvy developers, owners and managers use public relations firms and sponsor a continuing dialog with the marketplace as an integral part of their marketing effort.
Almost without exception, there are no real brands in the green building marketplace today. While a developer can sell GE or Whirlpool appliances to residential buyers, the lack of name recognition for most green technologies forces the developer, owner or manager to become the brand. Most firms are ill-equipped to take on this role.
Marketing as an Evolving Strategy
To compete effectively, property owners, managers and developers should understand how their marketing should evolve:
- Choose a strategy that incorporates high levels of differentiation or lower overall costs, with explicit focus on particular market segments that might include geographic, project type, owner type, psychographic profile, project size, specific technological approach or signature green measures.
- Reinforce this strategy internally and externally so that it becomes recognizable as a brand identity. Internal reinforcement includes training and certification of employees as LEED Accredited Professionals, for example; external reinforcement includes public relations activities (including green development and management awards) to increase the visibility of the firm and its key players.
- Consider developing proprietary tools for measuring sustainability (beyond a LEED building rating), as part of a property branding approach. Along with these tools, firms should develop methods to successfully execute LEED projects without incurring additional costs.
- Form close working alliances with contractors and design professionals to ensure that green building projects will actually get built within prevailing budget, time, technology options and resource constraints.
Jerry Yudelson is principal of Yudelson Associates, a consulting firm based in Tucson, Ariz. His forthcoming book, Green Building: A to Z, is a primer on green building terminology for developers, property owners and managers. He is also author of Developing Green: Strategies for Success.
IMMEDIATE PAST CHAIR
Rebecca L. Flora
Pittsburgh Green Building Alliance
Center for Maximum Potential Building Systems
Joe Van Belleghem
Buildgreen Developments Inc.
David A. Gottfried
WorldBuild Technology Inc.
|PRESIDENT, CEO and FOUNDING CHAIRMAN
S. Richard Fedrizzi
U.S. Green Building Council
1800 Massachusetts Avenue, NW
Washington, DC 20036
Why is Health Care Behind?
A recent report titled “Health Care Green Buildings SmartMarket Report” sheds some light on why the health care industry has lagged behind others in terms of building green.
Based on a survey of health care executives conducted by McGraw Hill Construction and sponsored by Turner Construction Company, the report reveals that 76 percent of respondents agree with or are neutral to the statement: “Green building creates an unjustified cost premium.” Eighty-two percent agree with or are neutral to the statement: “We are not convinced of the ROI from green buildings.” And 57 percent identified lack of knowledge about green techniques as the biggest obstacle to building green.
The report also indicated that 92 percent of respondents cited “operational cost savings” as an important reason to go green. Ninety-one percent cited “enhanced staff and patient health and well-being” as a reason for green health care facilities.
About $28 billion worth of health care facilities will be built in 2007, and only about 6 percent will be green, according to the report.
USGBC Pledges $1 Million for Green Building Research
The U.S. Green Building Council (USGBC) plans to commit $1 million for research in areas such as energy and water security, global climate change prevention, indoor environmental quality, and passive survivability in the face of natural and man-made disasters.
USGBC’s research funding comes on the heels of its recently published “Green Building Research Funding: An Assessment of Current Activity in the United States,” which found that research related to high-performance green building practices and technologies is woefully underfunded by all sectors. Using this work as its basis, the USGBC Research Committee will publish a national green building research agenda this fall that identifies key research areas for advancing building performance and market transformation.
Green Tool of the Trade
A free Web-based service called Green Building Studio (GBS) helps building design teams boost the efficiency of buildings by providing a simplified method of performing energy analysis early in the design stage. The new service works with existing computer-aided drafting or building information modeling (BIM) systems to communicate a project’s building geometry to the GBS Web site. GBS conducts an energy analysis of the design, shows the impact of particular design features, and allows the design team to compare alternatives.
The system works on an open data format called Green Building XML — a means of comparing data between BIM and energy-simulation software. The system also includes a Product Advisor feature that provides users with relevant product information as early in the process as the planning and schematic design phases. More information.
The leaders of 284 colleges and universities have signed a pact that aims to eliminate greenhouse gas emissions in educational institutions. The American College & University Presidents Climate Commitment includes schools from 45 states and represents about 15 percent of the country’s higher education institutions.
Signers of the plan intend to:
Top 10 Green Cities
Clinton Helps Cities Fund Energy-Saving Retrofits
Bill Clinton has announced the creation of a global Energy Efficiency Building Retrofit Program, a project of the Clinton Foundation’s Clinton Climate Initiative (CCI), which will assist cities in reducing their greenhouse gas emissions.
The program brings together four of the world’s largest energy service companies (ESCOs), five of the world’s largest banks and 15 of the world’s largest cities in a coordinated effort that aims to significantly reduce energy use in buildings.
Buildings are responsible for more than 50 percent of greenhouse gas emissions in most cities and more than 70 percent in mature cities, such as New York and London. This program will provide both cities and private building owners with access to funds to install energy-efficient products in their buildings. The goal is to achieve savings between 20 and 50 percent.
An initial group of 15 of the world’s largest cities has agreed to participate in the retrofit program, and offer their municipal buildings for the first round of energy retrofits: Bangkok, Berlin, Chicago, Houston, Johannesburg, Karachi, London, Melbourne, Mexico City, Mumbai, New York, Rome, Sao Paulo, Seoul, Tokyo, and Toronto. These participating cities have committed to work with the Foundation and its expert partners to develop programs to audit their buildings and to implement retrofits that improve their energy efficiency.
School Earns Gold — At a Bargain Price
For the Northland Pines School District in Eagle River, Wisc., a LEED Gold certification for its new high school achieved two goals: Building a model green school and doing so in a cost-effective manner. The original goal for the $28.8 million, 253,000-square-foot school was Silver certification, but as the building approached completion, the school decided to go for gold. What’s even more noteworthy is that cost of construction for Northland Pines High School came in at $116 per square foot, 23 percent less than the median cost of high school construction in 2006.
Thomas Cox, principal-in-charge for Hoffman, the firm that designed and built the school, attributes this to an integrated design process.
He says the goal of a LEED-certified school was present early on, and members of the community who were aware of the rating system were the force behind it. During the vision stages, community members voiced the desire to have an energy efficient school that would use resources wisely and be sensitive to the Wisconsin north woods environment.
The high school incorporates this mindfulness in all aspects of the structure. Naturally lit classrooms, clean air monitoring, dual flush toilets and waterless urinals help the school conserve resources. And the recycled content tiles in the atrium common area helped cut down on the use of new materials.
A conscious effort was also made to use materials that would require less maintenance, like brick and concrete block as opposed to gypsum board. The cleaning products for the school were also chosen based on their green qualities — low-fumes and non-hazardous chemicals — as indoor air quality was a priority for the facility that serves up to 600 students.
“IAQ is a big emphasis for school buildings,” says Cox. “Bringing in as much outdoor air as possible is a motivation when designing the HVAC system.”
School administrators also wanted green to be an ongoing part of the culture at Northland Pines. One example of this is a photovoltaic system that generates electricity by tracking the sun. The system is monitored on computers that science teachers use in their curriculum to teach students about how energy is used. This effort to educate the teachers and students has resulted in a boost in morale, says Cox. That’s because everyone understands they are part of something positive.
“The building serves as a symbol of the school district’s commitment to efficiency, but also to education,” he says. “The school district cares about the environment and the community’s money — we’re walking the talk.”
Green School, Teaching Tool
When a school goes green, faculty and staff have a chance to educate students about the importance of building green. At Great Seneca Creek Elementary School in Germantown, Md., school officials seized the opportunity to educate students and the entire community about the environment and energy efficiency.
Around the facility, near mechanical equipment and in every classroom, are signs explaining the green features of the building. School staff hopes these signs become a focal point of learning for students. Faculty incorporates the building’s impact on the environment into regular coursework, using the school itself as a three-dimensional textbook. The school also offers building tours that include scavenger hunts and board games to encourage community members and students to explore environmental topics outside of the school.
Taking an active role in teaching the community about their school, fourth grade students at Seneca Creek created the Student Eco Response team — the “green team.” Students sacrificed lunch and recess periods to create an online virtual tour of their school, concentrating on the building’s sustainable features. Using what they’ve learned about the building in the classroom, students narrate the tour in their own words.
The students have good reason to be proud of their school. Great Seneca Creek was the first Maryland public school to apply for LEED certification, and the 82,500- square-foot facility received LEED Gold certification earlier this year.
Central to the school’s green design is the geothermal heating and cooling system. The system’s pipes are buried under the school’s athletic field where the ground temperature is a constant 58 degrees Fahrenheit year round. In the winter, a water solution circulates through the pipes, absorbing heat from the earth and heating the school. During the summer, heat is extracted from the air in the school and transferred through the system’s heat pump and into the ground. The geothermal system is expected to save the school about $.50 per square foot in energy costs and maintenance for a total of $60,000 in savings per year.
The school uses a combination of low-flow fixtures, waterless urinals and dual-flush toilets to achieve a 43 percent savings in potable water.
During the construction process, 95 percent of the packaging and construction waste was recycled. Most building materials were sourced as locally as possible — within 500 miles of the site. Cabinets, restroom partitions and other interior materials are made from recycled or rapidly renewable resources.