Sustainability

LEED ROI: What is the Return on Investment of LEED Certified Buildings?

What is the return on investment of being LEED certified? And how can you maximize that ROI?

After all, there still exists some ambiguity when it comes to green buildings and their monetary return on investment. Let’s be clear: The ROI isn’t just social and environmental. It’s also financial.

At the same time, this information is crucial for any investment in green buildings.

Want to learn more about LEED ROI? Let’s find out.

What is LEED?

Leadership in Energy and Environmental Design (LEED)¸ granted by GBCI, is the most widely used third-party certification for green buildings. It includes ten different rating systems for the design, construction, and operation of buildings, homes, and neighborhoods.

LEED focuses on resource efficiency, health aspects, reduction in emissions, as well as a sustainable and cost-efficient building life cycle. It’s an open system and because it adapts to technical developments in the industry, every new version of LEED comes with updates and improvements.

Now, LEED is an established green building certification.

But why should you get LEED certified and not just build according to industry best practices when it comes to green buildings?

Simple. Because a third party verification, like LEED, builds trust. A certification proves that your building keeps to LEED standards.

This, again, translates into several advantages. For example: Brand awareness and higher asset value.

But still, deciding to use LEED becomes much easier once you know it does, in fact, mean a higher ROI.

Let’s first take a look at the benefits of LEED.

What are the benefits of LEED?

So, what are the benefits of LEED?

The benefits can be categorized into three different subcategories. 1) Assets, 2) Operations and maintenance, and 3) Work, life, and community.

Let’s look at each of these subcategories.

1. Assets

First:

What is the asset value of green buildings?

Because they are high-quality and high-performance buildings, green buildings are seen as more valuable than conventional buildings.

And because LEED certifications are reputable and give green projects transparency, they improve the value of green buildings.

According to a study by CoStar and US San Diego, which was based on CoStar’s US database of 2.8 million real estate properties, green buildings consistently achieved higher occupancy and rental rates, as well as higher sales prices.

And according to a report by the WorldGBC, green buildings tend to have higher sales prices, higher rental/lease rates, lower operating expenses, higher occupancy rates, and lower yields than other buildings.

Studies have shown that price premiums for certified buildings compared to non-certified buildings are between 0-30%.

However, that same report points out that unique conditions (such as local conditions) make it difficult to determine sales price increases.

But, as more and more companies and investors understand the other benefits of green buildings, their value has continued to increase.

So while sales prices are hard to predict, green buildings are still seen as having a higher value compared to other buildings.

Next:

What is the operations and maintenance ROI?

2. Operations and maintenance

Look:

Green buildings typically use resources more efficiently than other buildings.

And because of this, operations and maintenance costs decrease. For example, water, energy, and waste management costs tend to go down.

In terms of energy, green buildings achieve these savings by using more efficient lighting, heating, and cooling systems, as well as better insulation.

Water savings are achieved by reusing water, using green roofs, rainwater catchments, and more. Plus, in general, green buildings are built with more durable materials and therefore, they don’t require as much maintenance as conventional buildings.

Finally, green buildings tend to lower emissions by reducing the usage of energy and gas. This means a lower impact on the environment, as well as cost savings.

What are some specific savings?

A 2006 Capital E analysis of 30 green US LEED standard schools show that these schools achieved, on average, an energy reduction of 33% compared with conventional buildings. This translated into average savings of $0.38 per square foot per year.

However, while there are examples of successful LEED projects, there has also been criticism of whether LEED does, indeed, lead to energy savings. At the same time, most critics acknowledge some energy savings thanks to LEED.

3. Work, life, and community

Finally:

What is LEED’s impact on health and productivity?

A 2015 study by Harvard University shows that people who work in green buildings (well-ventilated offices with below-average levels of carbon dioxide and indoor pollutants) have significantly higher cognitive functioning scores.

And in terms of LEED, the health and productivity benefits are established.

LEED’s impact on health and productivity include:

  • Reduced absenteeism and sick days.
  • Improved working morale.
  • Better performance.
  • Less employee churn.

How do green buildings achieve these benefits? For example:

  • Better ventilation.
  • Improved air quality and acoustics.
  • Increased natural light.

Together with other studies, research by Carnegie Mellon University backs this up.

14 case studies show that productivity improves by 0.2% to 15% thanks to temperature control. Task air systems have been shown to improve productivity by 11% and 67% to 90% reduced churn costs.

11 case studies show that lighting can improve productivity by 0.7% to 26.1%.

And 17 case studies show that air quality improves health by 13.5% to 87%.

WGBC’s April 2018 report, “Better Place For People”, highlights 11 case studies.

For example, a net-zero carbon office in Australia had 94.5% staff satisfaction and 72% reported better health in LEED certified buildings.

LEED has a big impact on wellbeing, which means direct and indirect savings and improvements to people’s overall health, performance, and output.

What is the investment required to get LEED certified?

What type of investment do LEED certifications require?

After all, this is the top cited obstacle for not pursuing green buildings.

LEED typically comes with a green premium, ie. a cost premium that’s needed to build a green building instead of a conventional building.

What does the cost include? Up-front costs, such as the certification itself, but also more sustainable materials, better mechanical systems, design, and modeling.

In terms of the LEED certification costs, the cost depends on your project. Here is the specific fee structure.

And other costs? We can’t talk about any specific percentage or sum because these costs depend on the level of certification, as well as project-specific strategies.

According to the 2013 green building report by WorldGBC, reported green premiums range between 0% to 12.5% (the majority are between 0%-4%). LEED Silver or Gold green premiums range from 0% to 10% and LEED Platinum premiums fall in the 2% to 12.5% range.

As you can see, some of the green premiums start at 0%.

What this means is that projects can be achieved without any additional expenditure.

For example, a Harvard University analysis of 20 LEED projects in 2007 showed that 40 LEED credits could be achieved without extra costs.

In other words, green premiums aren’t unavoidable in LEED projects.

Plus, with the help of LEED consultants, you can make sure your investment gets you the highest ROI possible. (Want more information on LEED consulting? Here you go.)

Now:

You have a better understanding of LEED costs. So what about LEED ROI?

What is the ROI of LEED?

Now you know the benefits and costs of LEED.

So, does LEED give a return on your investment?

As we’ve seen, a well-managed green building can lower energy, water, and maintenance costs, as well as improve productivity and wellbeing and increase the value of the building.

While there might be a green premium (especially if we talk about higher LEED certifications), these can be paid off in a reasonable time span.

Want more specific examples? Let’s look at a few LEED projects and their results.

Adobe Systems, Inc.

Adobe received three LEED Platinum awards in 2006 for its headquarter towers. This project produced positive publicity and Adobe reported a net present value return on almost 20 to one on the investment.

The following three examples are reported by USGBC.

Orlando Magic’s Amway Center

The first NBA arena to earn LEED Gold certification, the Amway Center, was able to achieve nearly $700,000 in annual energy costs and overall, close to a million in a year.

The Old Globe

The San Diego regional theater The Old Globe was able to save more than 14,000 annual kilowatt hours and reduce overall water usage by 32%.

Shanghai 2010 Expo Center

The Shanghai 2010 Expo Center achieved 82.5% annual water savings and a 93% reduction in stormwater runoff volume.

LEED in the future

What will LEED look like in the future?

According to the World Green Building Trends (2018), green building activity continues to grow.

Green buildings are a smart investment from a cost perspective. But for many businesses, environmental responsibility continues to grow in popularity.

What this means is:

Everything points to the fact that LEED has and continues to produce a return on investments.

Want to get LEED certified?

That’s it. That’s what you need to know about LEED ROI.

At the end of the day, LEED provides mainly upsides. Not only for your bottom line but also for some of your most important assets, like your brand.

It does require investments, yes. But benefits, both in the short and in the long term, outweigh these costs.

Want to learn more about how you can use LEED for your projects? Read more about our LEED services here.

 


The Power Station Challenge: How Did NYU Abu Dhabi Achieve Energy Savings of 30%?

How did we help NYU Abu Dhabi achieve energy savings of 30% when benchmarked against the ASHRAE 90.1 baseline? It all started with the IES Power Station Challenge, a challenge that focuses on creating sustainable built environments.

Want to know more? Read on!

What is the Power Station Challenge?

The Power Station Challenge is a challenge by our long-term partner IES, a world leader in intelligent sustainability solutions for the built environment. The challenge was launched to promote the IES software Virtual Environment (VE), which helps create sustainable development and construction projects. This is a software we at Alpin use to leverage our thought leaders in building physics to deliver the most insightful energy analysis to our clients.

The goal of the Power Station Challenge is to save 100 power stations from being built. We’re a big part of this. So far, Alpin’s Energy Modeling services, such as the NYU Abu Dhabi development project, have saved more than 100,000,000 Kilowatt hours.

What does this mean?

Let’s use an example. If you take 30,000 cars and line them up bumper to bumper, enough to stretch them from Dubai to Abu Dhabi, they would emit over 44,000 tonnes of CO2. This is the equivalent of 100,000,000 kWh of energy, enough to power over 14,000 homes.

And that’s what we’ve help our clients save- over $7.25 million per year, a number that is steadily increasing.

Energy Modeling is a vital part of our commitment to lowering the carbon footprint and maximizing our clients’ return on investment. Proper modeling optimizes a client’s construction budget.

How? Our clients lower consumption during the operational phase and we ensure the most cost-effective materials are utilized in a building’s façade.

While MEP equipment can be very expensive, Energy Modeling allows us to simulate exactly where our clients can make savings.

Our Energy Modeling team also integrates Computational Fluid Dynamics (CFD) – software that visualizes how air patterns affect a building as it flows past and can contribute to cooling strategies.

Additionally, our team integrates services into life cycle analysis in order to help visualize the cost savings and investment profiles early in the project. This leads to higher ROI.

And that’s what we helped NYU Abu Dhabi do. So what was the project all about? Here’s what you need to know.

What was the NYU Abu Dhabi development project all about?

NYU Abu Dhabi, a liberal arts university, opened in 2014. Its campus is located on Saadiyat Island. The campus covers 450,000 square meters and reaches heights of over 50 meters.

And what was our role in this development project?

We were invited to conduct stage energy analysis. The goal was to ensure that the project would reach its energy savings goals and that it would comply with the local standard, Estidama PBRS.

This standard requires projects to be 12% above the ASHRAE 90.1 baseline. However, the project had already achieved this standard. Now, the goal was to achieve 25% above the ASHRAE 90.1 baseline to achieve a 2 Pearl rating.

How we achieved energy savings of 30% when benchmarked against the ASHRAE 90.1 baseline

So how did we achieve this goal… And more?

At Alpin, our mission is to be at the forefront of sustainable development and construction. That’s why we founded Alpin Innovation Labs, which is all about developing these solutions and transforming the construction industry. One of the solutions Alpin Innovation Labs offers is to help our clients use technology and software to meet ASHRAE requirements.

With the tools, systems, and knowledge we’ve developed in Alpin Innovation Labs, as well as using IES’ software VE to incorporate the ECMs, we helped the main contractor verify the parameters they set out in terms of u-value, lightning, and HVAC. We provided feedback on the HVAC and water system to determine potential energy and water consumption savings.

In the end, we were able to achieve energy savings of 30% when benchmarked against the ASHRAE 90.1 baseline.

The result?

NYU Abu Dhabi exceeded its goals and achieved a 2 Pearl rating.

How did our results support the Power Station Challenge?

What’s the result of the Power Station Challenge?

So far, the challenge has saved an amount of energy that equals 30 power stations.

Our NYU Abu Dhabi project, as well as other projects, have been instrumental in achieving these results.

Find out more about our Energy Model and BIM Integration services.

 


What Impact Does Saudi Arabia’s Vision 2030 Have on Sustainable Development?

The Kingdom of Saudi Arabia is a strong investor in a more sustainable future. A notable example? The policy paper Vision 2030, which in many ways talks about sustainability, including sustainable development.

As multi-faceted specialists focused on sustainable development and with a presence in Saudi Arabia, we at Alpin are excited to see Saudi Arabia’s ambitious goals become reality. In fact, for the past seven years, we’ve been working on helping the country achieve them.

Want to know more about Saudi Arabia’s vision and how it will be achieved? Let’s dive right in.

What are Saudi Arabia’s sustainability goals?

Here’s what it’s all about:

In its policy paper Vision 2030, Saudi Arabia sets out goals that will steer its policy-making over the next decades to enable a thriving society for its citizens. Saudi Arabia is positioning itself as a strategic business hub in the Islamic world and as a connector of three continents. Also, by creating this vision, the country is transforming into an investment powerhouse.

Now, the paper has three main themes (a vibrant society, a thriving economy, and an ambitious nation) with different subthemes.

Many of these subthemes reference sustainability in one way or another. For example, the paper talks about environmental sustainability, renewable energy, and protecting resources.

Plus, some subthemes make a reference to sustainability more indirectly. The paper mentions developing cities as a goal. A big part of this? Sustainable development and construction.

This is at the core of what we do at Alpin. We believe in delivering the most sustainable development solutions. For example: One of our projects is a 10-year build out- a key city development where we act as sustainability advisors on the client side.

So are we happy that more countries like Saudi Arabia are setting ambitious sustainability goals for their development and construction projects? You bet. And here’s how we help Saudi Arabia achieve these goals.

How will Saudi Arabia achieve Vision 2030?

Vision 2030 sets out ambitious goals. But how will Saudi Arabia achieve them?

Alpin has had a strong presence in Riyadh, Saudi Arabia, since 2012 and during quite some time, we’ve been investing in the country’s long-term viability. We’re committed to helping Saudi Arabia achieve its goals and implement Vision 2030.

And one thing is clear:

Sustainable development will require an innovative approach.

At Alpin Innovation Labs, that’s exactly what we do. Our vision is to produce innovative practices that push the industry to become more sustainable.

To date, we’ve worked on some of the biggest projects in Saudi Arabia in various sectors (for example, engineering, banking, and finance). Some of our projects include the King Khalid International Airport, the main metro station in Riyadh designed by Zaha Hadid, the largest manufacturing plant in the country, as well as the first LEED platinum development and LEED EBOM projects in Saudi Arabia.

And as Saudi Arabia continues to develop cities to achieve its Vision 2030, we continue delivering innovative solutions to meet the needs of our clients.

What’s ahead for Vision 2030?

So, will Saudi Arabia achieve its ambitious sustainability goals by 2030?

We believe so. That’s why we’ve invested extensively in the country. And as Trusted Advisors, we continue using our team, advanced processes, and innovative technology to work on the Kingdom’s most innovative development projects.

Visit Alpin Saudi Arabia

 


Complex Infrastructure Projects: How to Create Sustainable Projects

How do you make complex infrastructure projects sustainable?

At Alpin Limited, this is one of our core competencies. We’ve worked on several high-profile and large-scale projects, such as the Dubai + Riyadh Metros and right now, the 2020 World Expo.

To ensure that we’re meeting the strictest requirements, we use accreditations such as CEEQUAL. Here’s what our projects look like.

What is CEEQUAL?

CEEQUAL promotes sustainable civil engineering, infrastructure, landscaping, and public realm projects. It’s an evidence-based sustainability assessment, rating, and awards scheme. It awards projects that go beyond the minimum threshold in terms of environmental and social performance. 

By using CEEQUAL in your construction projects, you get benefits like these:

  • Sustainability improvements. Resource efficiency and a reduction of complaints and environmental incidents. 
  • PR. CEEQUAL backs up your social responsibility policies. 
  • Reduced costs. Thanks to sustainability planning, you reduce your construction costs. CEEQUAL reportsthat cost reductions have ranged from £3000 to £5 million.

At Alpin, we work towards changing the construction industry to become more effective and sustainable. CEEQUAL works perfectly with our goals and that’s why we are CEEQUAL accredited. 

How we create sustainable complex infrastructure projects

Thanks to years of experience and accreditations like CEEQUAL, one of our core areas of expertise are sustainable complex infrastructure projects. Here’s what we focus on.

Transportation

As you know, projects involving major airports and train stations require meticulous planning. For us, it’s important to use our innovation, reliability, and high level of expertise when we work on projects that work now and in the future. That involves sustainability. 

Some of the projects we’ve worked on include the expansion of King Khalid International Airport where we helped save 47% water and 19% energy. 

Developing communities

Another one of our core competencies includes creating communities that withstand the test of time and unexpected environmental impacts. We work to ensure that the boom in city living will happen in a sustainable way. We’ve done this by developing sustainable community rating systems, regional 2030 plans, and proofing against climate change effects. One of our projects is the Al Zahia Gardens Masterplan in the United Arab Emirates.

Case study: 2020 World Expo

Alpin was chosen as the design phase commissioning authority for the 2020 World Expo in Dubai. One of the core themes for the Expo, besides Mobility and Opportunity, is Sustainability. 

Our role will be to integrate these themes into the construction, operation, urban design, and legacy of the site. We’ll also focus on the efficient use of resources. Our goal is for this World Expo to be the reference point for sustainability for future Expos. 

And how will we ensure this? By meeting US Green Building Council requirements and local standards. And as a CEEQUAL accredited organization, these standards will naturally impact the project. 

How can you create sustainable projects?

Working on a complex infrastructure project? Want to improve your own construction standards? 

That’s what we help you do at Alpin by using our expertise and accreditation systems like CEEQUAL.

Want to learn more about our approach to making complex construction projects sustainable? Read more about how we help you meet even the strictest green building certifications here.


How Being the First WELL Certified™ Building in the Middle East Helps Us Create More Productive and Profitable Workspaces

Earlier this month, our company, Alpin Limited, was awarded WELL Certification at the Silver Level for New and Existing Interiors by the International WELL Building Institute™ (IWBI™) as the first organization in the Middle East.

Why are we so happy about this? Because it shows our commitment to employee wellbeing and health. But not only that. Thanks to this certification, we’ll be able to help our clients create more productive and profitable workspaces.

How exactly? Let’s find out.

What is the WELL Building Standard™?

In short, the WELL Building Standard™ is the most important building standard to focus on enhancing people’s health and wellness through the buildings where we live, work, and play.

This performance-based certification was created by physicians, scientists, and industry professionals to use best practices in design, construction, and evidence-based scientific research.

When an organization achieves this standard, it shows a deep commitment to people’s wellbeing. And that’s what made it so attractive to us.

Why we wanted to get WELL Certified™

So why did we want to get WELL Certified™?

Our focus is on projects that are environmentally efficient. But our commitment doesn’t stop there. We believe that employee health and wellbeing should be a top priority because people are any company’s biggest asset.

For example:

Our Alpin Healthy HR campaign, which is a wide-ranging initiative centered on a commitment to enhancing our employees’ wellbeing, goes hand in hand with this commitment. In fact, before we got WELL Certified™, our internal gap analysis showed that we were already about 80% there.

WELL is the most prestigious recognition in this space and it aligns perfectly with our values.

Is WELL an expense or an investment?

It makes sense. Focusing on employee health and wellbeing results in a more productive workforce. Your company becomes a more attractive employer, employees stick around for longer, and you save on costs like employee absenteeism.

But still, WELL does come with its own costs and expenses. After all, changes need to be made in several different areas- air, water, light, nourishment, fitness, comfort, and mind. For example, to become WELL Certified™, we made several investments. These include an on-campus gym, noise level improvements, and a new air filtration system.

Is it all worth it from a cost perspective?

Here are just a few examples of the benefits of WELL:

  • An engineering consulting firm, Cundall, spent $80,000 to create a workspace that lived up to WELL Gold level standards. At the same time, absenteeism dropped by 50% and staff turnover dropped by 27%. This meant a return on investment in just the first year.
  • According to CBRE Madrid, 80% of employees believed that their offices made them more productive.

See how WELL is an investment that will pay itself back and more… Not an expense?

How are we using WELL to improve?

As a company, we’re committed to constantly improving and innovating. That’s how we can help our clients create spaces that work seamlessly with their goals.

In fact, beyond being WELL Certified™ we’re committed to staying at the forefront of our industry. For example, as the first company in Masdar City, Abu Dhabi, we were awarded the LEED Gold Certification for Commercial Interiors, which is one of the world’s most recognized green building codes.

But that’s not all.

For us, WELL is not just a certification. It’s a way of life.

We’re constantly aiming to get better and improving our commitment to employee health and wellbeing. WELL is embedded in our office development practices, HR policies, and approach to teaming.

It will help us create a better workplace. But even more so, we can easily integrate WELL into our client projects.

Want to use WELL in your organization?

Right now, we’re working with select developers and Fortune 500 firms to deliver the next series of WELL Certified™ projects.

Want to use the same standards to achieve better employee productivity, happier employees, lower employee-related costs, and to increase the value of your building assets?

Learn more about how WELL can help you get there.


Power Station Challenge Story by New York University Abu Dhabi

Our partner IES interviewed our Energy Specialist & AILA officer Farah Ghanem regarding his involvement on the Abu Dhabi New York University Project.

Download New York University's Case study

Also check out the feature on IES website.

Whitepaper: Kingdom of Saudi Arabia Vision 2030 and Sustainability

Vision 2030 is Saudi Arabia’s roadmap for future economic and developmental action that expresses their long term goals and objectives. It is being used as a basis of identifying the general direction of policies.

Vision 2030 has three main themes

  • Vibrant Society
  • Thriving Economy
  • Ambitious Nation

Each of these themes has sub-themes and associated objectives, goals and commitments. Many of the goals and objectives within Vision 2030 make reference to sustainability, directly and indirectly.

To continue reading on this that Alpin recently published, download Whitepaper: Kingdom of Saudi Arabia's Vision 2030 and Sustainability


Alpin’s drone technology revolutionizes building inspection

Let’s face it, it would be pretty expensive to try to air condition the desert, so we were curious as to why so many building owners were letting their investment dollars literally slip through the cracks.Read more


Prioritizing employee well-being and boosting productivity with the WELL rating system. Alpin HQ, the perfect blend of LEED + WELL

Imagine a work environment which makes you feel relaxed, happy and productive. A motivating space where you don’t leave at the end of the day zapped of energy, despondent about the week that drags ahead. At Alpin, we believe our people are our most important asset and looking after our employees’ well-being is a top priority. That’s why we were quick to adopt the WELL rating system for our headquarters in Masdar City, Abu Dhabi. It’s a certification that can turn a stressful work environment into a place where you actually look forward to coming to each day.Read more


Alpin’s Energy Modeling saves clients over $7.25 million per year

Take 30,000 cars and line them up to bumper to bumper, enough to stretch from Dubai to Abu Dhabi. Together they would pump over 44,000 tonnes of CO2 into the atmosphere annually. That’s the amount Alpin’s Energy Modeling team helps clients save every year – the equivalent of 100,000,000 kWh of energy and enough to power over 14,000 homes. This in turn relates to client savings of more than $7.25 million every year, and this number is only increasing.

Energy Modeling is a vital part of our commitment to lowering the carbon footprint and maximizing our clients’ return on investment. Proper modeling greatly helps optimize a client’s construction budget, by not only lowering consumption during the operational phase, but also ensuring the most cost-effective materials are utilized in a building’s façade. While MEP equipment can be very expensive, Energy Modeling allows us to simulate exactly where our clients can make savings. Our EM team also integrates Computational Fluid Dynamics (CFD) – software that helps to visualize how air patterns affect a building as it flows past and can contribute to cooling strategies. Additionally, our EM team integrates services into life cycle analysis in order to help visualize the cost savings and investment profiles early in the project. This leads to higher ROI for our clients.

Find out more details on how Alpin can help risk proof your energy costs. Also find out about Energy Model and BIM Integration.