Green office construction: a discounted after-tax cash flow analysis

2014 ◽  
Vol 32 (5) ◽  
pp. 474-484 ◽  
Author(s):  
Billie Ann Brotman
Keyword(s):  
Energy Savings ◽  
Cost Benefit ◽  
Green Building ◽  
Green Buildings ◽  
Present Value ◽  
Content Type ◽  
Green Construction ◽  
Tax Incentive ◽  
The Usa ◽  
Equipment Wear

Purpose – The purpose of this paper is to address the apparent slow acceptance on the part of developers located in the USA to seek green certifications. If green-certified construction costs more than non-green construction, then is there a financial reason for not seeking a green rating. Do green buildings perform better than non-green buildings financially? The paper develops and presents a discounted present value model for doing a cost-benefit analysis for building green. This model enables an investor to determine the feasibility of constructing a new green-certified building instead of a conventional non-green building. Non-green buildings are not certified by a rating agency such as Leadership in Energy and Environmental Design (LEED), Energy Star or Building Research Establishment Environmental Assessment Method (BREEAM). Real estate permits are granted by local municipalities in the USA. This means that local government mandates requiring green construction that significantly adds to the initial cost of a project could have the unintended result of encouraging new non-green construction just outside their municipal boundaries. Design/methodology/approach – The paper collects publically available research data for office buildings located in the USA, and inputs this information into an income statement. It tests the hypothesis: is green-certified construction a financially feasible choice for an investor? An incremental approach using a 15-year holding period is presented. This time period takes into account equipment wear and tear. Heating/cooling systems and other green-technologically based operating systems have a limited life and do not last for 30 or 40 years. They are likely to need replacement after 15 years have lapsed. Findings – The negative net present value (NPV) results and high payback periods indicate that increased rents for green construction, a tax credit for the present value loss and/or property-tax reduction covering the shortfall is needed as an incentive to commercially build green. The implication of a negative NPV is that green office buildings will be built by government agencies where green is mandated, corporations that want a green image and benefit from this image, where local ordinances mandate green construction features and where local and federal tax incentives are available increasing a construction project's feasibility. Research limitations/implications – The limitation of any cost-benefit study is that analytical models and/or data used to forecast energy and water consumption savings in green-certified buildings compared to conventional buildings can be inaccurate. Forecasting models can understate or overstate the actual savings realized from green construction especially in the long-term given the difficulty of predicting equipment wear and tear, net rents and energy costs. The modeled percentage cost associated with green new construction features could remain constant or grow through time. Tables I and II results assume energy and water expenses remain a constant percentage over the 15-year period. The agency costs associated with obtaining a LEED or BREEAM certification was not calculated as an upfront cost. Certification by LEED or BREEAM increases the upfront cost associated with building a green building. Practical implications – The length of the payback period estimates coupled with negative NPV for green certified compared to non-green construction suggests that developers do not have an incentive to build green. Higher WACC rates would result in green-certified projects being less feasible to build. Social implications – The LEED certification point system may need to be reviewed. Points are assigned for features that improve occupant satisfaction, but may have little impact on reducing energy usage. Originality/value – A model is presented for determining whether green-certified construction is financially feasible. The model enables the investor to determine the size of a tax incentive that is needed to enable new green construction to be economically feasible to build. The higher the negative NPV the larger the income or property tax incentive or other financial incentives needed. Prior research studies compared green and non-green buildings, but did not compare the energy savings generated to the additional construction and upfront costs incurred using a discount rate. They assumed the energy savings justified the additional initial cost associated with building a new green certified.

Sustainable healthcare design

Facilities ◽  
2016 ◽  
Vol 34 (5/6) ◽  
pp. 264-288 ◽  
Author(s):  
Rana Sagha Zadeh ◽  
Xiaodong Xuan ◽  
Mardelle M. Shepley
Keyword(s):  
Energy Use ◽  
Energy Savings ◽  
Green Building ◽  
Energy Information Administration ◽  
Content Type ◽  
Healthcare Facilities ◽  
Healthcare Design ◽  
Significant Difference ◽  
Health Related ◽  
The Usa

Purpose Healthcare projects face multiple obstacles in achieving sustainability. This paper aims to provide information regarding the energy consumption of healthcare facilities, to identify barriers to sustainability and to suggest methods to improve the effectiveness of these buildings. Design/methodology/approach This study investigates sustainability in healthcare buildings by examining national databases about energy use and energy savings. The authors then initiate a dialogue on this topic by interviewing experts in healthcare planning and design regarding the implications of this data, challenges to sustainability and potential solutions to these challenges. Findings An analysis of data from the Energy Information Administration revealed that healthcare facilities rank second among building types in the USA in energy use per square foot and rank fourth in total energy use. Data from the US Green Building Council showed that only 1 per cent of healthcare buildings are registered with the Leadership in Energy and Environmental Design rating system, and 0.4 per cent have achieved certification, which is low compared with other building types. Research limitations/implications Research and discussion must continue engaging all stakeholders to interpret the data and identify transformative solutions to facilitate sustainable healthcare design construction and operation. Practical implications It is important to approach sustainability in healthcare from social, economic, environmental and health-related perspectives. The authors identify five major barriers to sustainable healthcare design and construction and discuss 12 practical solutions. Originality/value Given the energy demands of healthcare buildings, facilitating their sustainability has the potential to make a significant difference in national energy use. Empirical research and evidence-based design can potentially help to accelerate sustainability by clarifying impacts and documenting the economic and operational returns on investment.

Examining barriers and measures to promote the adoption of green building practices in Pakistan

2017 ◽  
Vol 6 (3) ◽  
pp. 86-100 ◽  
Author(s):  
Sana Azeem ◽  
Malik Asghar Naeem ◽  
Abdul Waheed ◽  
Muhammad Jamaluddin Thaheem
Keyword(s):  
Financial Incentives ◽  
Public Awareness ◽  
Green Building ◽  
Green Buildings ◽  
Building Codes ◽  
Common People ◽  
Policy Makers ◽  
Content Type ◽  
The Common ◽  
Green Building Codes

Purpose The purpose of this paper is to investigate the barriers inhibiting the adoption of green building and measures to promote this approach in Pakistan. Design/methodology/approach Barriers and measures were identified and examined by using a combination of research methods, including literature review, questionnaire survey, and in-depth interviews with the construction industry-related practitioners working in Pakistan. Ranking technique and factor analysis were used to identify the significant issues associated with the adoption of green building practices. Findings As per the survey results, the most critical barrier is “lack of awareness among people about the importance and advantages of adopting green building practices,” followed by “lack of incentives from government” and “lack of green building codes and regulations,” respectively. The results also indicate that most important measure to promote the adoption of green buildings is “creation of public awareness toward green initiatives through seminars, workshops, and discussions,” followed by “availability of green building codes and regulations (mandatory to apply)” and “financial incentives and penalties by the government (e.g. soft loan, tax) for promoting green building practices,” respectively. Research limitations/implications Research limitation is that its findings, other than Pakistan, cannot be generalized to other developing countries. Practical implications Findings of the research will be helpful in sensitizing the regulatory agencies, the policy makers, and the building construction practitioners about the barriers to adoption of green building practices. The suggested measures will help in devising policies and economic measures to promote the construction of green and environment-friendly buildings. Social implications This research will help the common people to know about the importance of green buildings that may lead to a deviation from the practice of traditional buildings to a widespread trend of building green buildings. This will lead to drastic reduction in demand for energy and considerable monetary savings for the common people. Originality/value The findings of this study are expected to contribute valuable information to decision makers for the better understanding of key issues that call for more attention in the promotion of efforts of green building practices in Pakistan. The results are based on the perception of local stakeholders, but might also be helpful for policy makers in other countries.

scholarly journals Key drivers for green building project financing in Ghana

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kofi Agyekum ◽  
Chris Goodier ◽  
James Anthony Oppon
Keyword(s):  
Construction Industry ◽  
Qualitative Data ◽  
Green Building ◽  
Green Buildings ◽  
Sub Saharan Africa ◽  
Project Financing ◽  
Content Type ◽  
Comparative Review ◽  
Key Drivers ◽  
Building Project

PurposeThe majority of the literature on green buildings in Ghana focuses on environmental benefits, innovative designs, construction technologies and project management techniques. However, little is known about how such facilities are financed. This issue creates potential knowledge gaps, one of which this study aims to address. This study examines the key drivers for green building project financing in Ghana.Design/methodology/approachThe study uses an explanatory sequential design with an initial quantitative instrument phase, followed by a qualitative data collection phase. An extensive critical comparative review of the literature resulted in the identification of eight potential drivers. One hundred and twenty-seven questionnaire responses based upon these drivers from the Ghanaian construction industry were received. Data were coded with SPSS v22, analysed descriptively (mean, standard deviation and standard error) and via inferential analysis (One Way ANOVA and One-Sample t-Test). These data were then validated through semi-structured interviews with ten industry professionals within the Ghana Green Building Council. Data obtained from the semi-structured validation interviews were analysed through the side-by-side comparison of the qualitative data with the quantitative data.FindingsThough all eight drivers are important, the five key drivers for the Ghanian construction industry were identified as, in order of importance, “high return on investment”, “emerging business opportunity”, “ethical investment”, “conservation of resources” and “mandatory regulations, standards, and policies”. The interviewees agreed to and confirmed the importance of these identified drivers for green building project financing from validating the survey's key findings.Research limitations/implicationsKey limitations of this study are the restrictions regarding the geographical location of the collected data (i.e. Kumasi and Accra); timing of the study and sample size (i.e. the COVID-19 pandemic making it difficult to obtain adequate data).Practical implicationsThough this study was conducted in Ghana, its implications could be useful to researchers, policymakers, stakeholders and practitioners in wider sub-Saharan Africa. For instance, financial institutions can invest in green buildings to expand their green construction and mortgage finance products to build higher value and lower risk portfolios. The findings from this study can provide investors with the enhanced certainty needed to help guide and inform their investment decisions, i.e. what to invest in, and when, by how much and how a scheme being “green” may influence their rate of return. Also, for building developers, it will give them a clearer understanding of the business case for green buildings and how to differentiate themselves in the market to grow their businesses.Originality/valueThis study's findings provide insights into an under-investigated topic in Ghana and offer new and additional information and insights to the current state-of-the-art on the factors that drive green building project financing.

Site planning and design of green residential building projects: case studies in China

2019 ◽  
Vol 27 (2) ◽  
pp. 525-543
Author(s):  
Xiaosen Huo ◽  
Ann Tit Wan Yu ◽  
Wu Zezhou ◽  
Wadu Mesthrige Jayantha
Keyword(s):  
Case Studies ◽  
Questionnaire Survey ◽  
Residential Buildings ◽  
Real Life ◽  
Green Building ◽  
Green Buildings ◽  
Building Projects ◽  
Content Type ◽  
Planning And Design ◽  
Site Planning

Purpose The purpose of this paper is to present site planning and design (SPD) relevant variables and items in practice for practitioners to better understand and implement SPD in green building projects. Design/methodology/approach The research methods include questionnaire survey and case studies in the context of China. A questionnaire survey was adopted to identify the importance of 13 variables and the corresponding 38 items in SPD of green residential buildings. Three green residential projects including one in Hong Kong and two in Mainland China were selected to investigate the SPD considerations in practice and to discuss the necessary improvement. Findings The results show that 12 out of the 13 variables of SPD in green buildings are involved in the three case projects to some extent, thereby underscore the importance of these variables. The potential improvement in real-life SPD of green buildings is also discussed such as adopting design-build and integrated project delivery methods and preserving and protecting cultural characteristics on site. Originality/value The research findings may serve as a reference for practitioners to better conduct SPD in green building projects.

Users’ preference for green features in office properties

2018 ◽  
Vol 36 (4) ◽  
pp. 374-388 ◽  
Author(s):  
Matthew Oluwole Oyewole ◽  
Markson Opeyemi Komolafe
Keyword(s):  
Design Methodology ◽  
Green Building ◽  
Green Buildings ◽  
Building Industry ◽  
Point Scale ◽  
Content Type ◽  
Preference Index ◽  
Building Practice ◽  
Self Administered Questionnaire ◽  
Practical Implications

Purpose The purpose of this paper is to examine the preference of office property users for green features in Lagos, Nigeria. This is with a view to determining the degree of users’ aspiration for green buildings in the country. Design/methodology/approach The study purposively sampled two office properties from the management portfolio of 88 registered estate firms in Lagos. Data were collected using self-administered questionnaire on two users purposively selected from each of the properties. The data were analyzed with the use of frequency distribution, percentages and measures of the users’ preference index. Findings The results revealed that the preference for green features by office property users in the study area was above average (2.5 on a five-point scale). Feature relating to “building ecology, waste and recycling” is the most preferred feature with UPI of 3.970 while those relating to “owner and occupant education” with UPI of 3.558 were least in preference. Practical implications The paper concludes that with the preference of users for green features in the study area, it may be necessary for government to strengthen the existing framework for sustainable development. Also, increased sensitization of investors, users, professionals and other stakeholders in the building industry is pertinent to the success of green building practice in the country. Originality/value This is one of the few studies on users’ preference for green features in emerging economy, particularly in the Nigerian context.

FINANCIAL AND ECONOMICAL RISKS IMPACTING COST OF LEED CERTIFIED PROJECTS

2017 ◽  
Vol 4 (1) ◽  
Author(s):  
Asli Pelin Gurgun ◽  
Gul Polat ◽  
Hasan Gokberk Bayhan ◽  
Atilla Damci
Keyword(s):  
Financial Incentives ◽  
Green Building ◽  
Green Buildings ◽  
Certification Process ◽  
Literature Research ◽  
Leed Certification ◽  
Green Construction ◽  
The World ◽  
Financial Burdens ◽  
The Cost

Green buildings have benefits for the environment, which has been acknowledged by the vast majority of building professionals. LEED is one of the most recognized green building certification systems in the world. However, issues related to financial aspects of the entire process and LEED certification may be significant and constitutes new financial burdens to the cost of the projects. After a diligent literature research, main issues related to cost can be identified under four major categories such as; cost of the certification process, scarcity of insurance solutions, rental due to delay related to green construction procedures and conditions, and failure to use of financial incentives (tax/loan discounts, low financing rates) because of delays or lower certification levels than expected throughout the LEED certification. This study focuses on the assessment of professionals’ experiences about the financial and economical risks green buildings and their impacts on cost by identifying the most common drawbacks and evaluate relevant precautions against them. Analysis results show that high cost of certification process is one of the concerns for the majority of the professionals. Rental loss due to delay related to green construction procedures and conditions, costs related to certification, documentation, practices and design are found as the other risk factors in the study. Proper allocation of such risks in contract documents and special insurance products with appropriate endorsements could be used to mitigate related risks.

Water efficiency in Malaysian commercial buildings: a green initiative and cost–benefit approach

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Farhana Mohd Zaini ◽  
Qi Jie Kwong ◽  
Lynne Barbara Jack
Keyword(s):  
Detailed Analysis ◽  
Water Use ◽  
Water Consumption ◽  
Residential Buildings ◽  
Cost Benefit ◽  
Green Building ◽  
Commercial Buildings ◽  
Water Efficiency ◽  
Potential Cost ◽  
Content Type

PurposeThe demand for potable water increases with population growth, given its role in sustaining life. As part of a wider approach to ensuring sustainable provision, this has prompted a number of carefully formulated water efficiency improvement plans for buildings, one of the highest water-consuming sectors. This paper presents a detailed analysis of water efficiency potential for a multi-storey commercial complex and an office building in central Malaysia.Design/methodology/approachIn this study, a detailed analysis of the water use and efficiency of the water fittings was carried out. Important data such as historical water use and details of water fittings were acquired during a field survey. A series of water flow rate tests were conducted at the selected buildings and each of the water systems was analysed separately, using the criteria of water efficiency stipulated by a locally applied green building tool. A comparison of water consumption before and after the improvement plan was then made.FindingsFindings from the field surveys indicate that only some of the water fittings were certified with recognised efficiency ratings, which suggests a good opportunity for improvement. The proposed replacement of more-efficient fittings could potentially improve the obtainable green credit points by at least 10 from a maximum of 15. A cost–benefit analysis for a water fitting replacement scheme shows that the estimated payback period is less lengthy for the larger commercial building due to the higher potential savings.Practical implicationsStrategies for improvements in water efficiency for existing non-residential buildings are provided in this paper. The same water consumption analysis procedure can be used by maintenance engineers and other practitioners in building assessments where water efficiency and sustainability in building operation are of concern.Originality/valueThis case study responds to the need for efficient use of freshwater and provides insight into the water efficiency opportunities for commercial buildings. The potential cost savings for replacements of inefficient water fittings have been analysed using a green building tool as a guide. This has not been extensively analysed in previous studies.

scholarly journals Techno-Economic Analysis of Green Construction Regulations Plus Survey for Prototype Implementation in Karachi

2021 ◽  
Vol 64 (2) ◽  
pp. 161-172
Author(s):  
Muhammad Imran Majid ◽  
Muhammad Ibrahim Khan
Keyword(s):  
Construction Projects ◽  
Building Materials ◽  
Green Building ◽  
Green Buildings ◽  
Indoor Environmental Quality ◽  
Major Barrier ◽  
Green Construction ◽  
Construction Methods ◽  
Local Construction ◽  
The Government

  Conventional buildings consume large amounts of energy and are the source of greenhouse gas emissions contributing to climate change. The shortage of green buildings in Pakistan have been said to be due to shortage of knowledge of the benefits of essential green building materials and the absence of  a regulatory framework. The study is qualitative and quantitative and is divided into two parts. This review paper focuses on awareness in the Pakistan's local construction market concerning green buildings through a survey questionnaire. Data collection procedure consists of 60 questionnaires related to green building construction awareness and priorities within Karachi's construction sector. Also, a focus group and personal interviews conducted with at least 5 professionals working in local construction projects are analyzed. The research questions formed from detailed literature review were analyzed and found that energy conservation, environmental/resource conservation and improving indoor environmental quality are major driving factors for green building development. Similarly, there is a lack of knowledge of green construction methods and regulations and lack of support from the government. This has been found as the major barrier in going towards green construction. We recommend policy directions towards this end and elaborate points of concern to the authorities.    

Job satisfaction of project managers in green construction projects

2019 ◽  
Vol 27 (1) ◽  
pp. 205-226
Author(s):  
Bon-Gang Hwang ◽  
Xiaojing Zhao ◽  
Jane Lim
Keyword(s):  
Job Satisfaction ◽  
Structural Equation ◽  
Construction Projects ◽  
Green Building ◽  
Project Managers ◽  
Technical Requirement ◽  
Incentive Condition ◽  
Content Type ◽  
Construction Companies ◽  
Green Construction

Purpose Green building is a promising approach to improve resource efficiency and achieving sustainable development. The success of green construction projects is closely associated with the performance of project managers (PMs), while job satisfaction plays a major role in the performance of PMs. However, the emphasis placed on the job satisfaction of PMs in green construction projects remains minimal. The purpose of this paper is to identify the relationships between the job satisfaction of PMs and its key influencing factors in green construction projects, and to propose feasible strategies to improve the job satisfaction of PMs. Design/methodology/approach A questionnaire survey is conducted, data collected from 105 construction PMs are analysed using structural equation modelling. Interviews with five industry experts are further conducted to substantiate the results. Findings The results identified four major components of job satisfaction, namely, “job content”, “resource adequacy”, “work context” and “the personality and competence of jobholders”. The analysis also found that “technical requirement” and “split incentive” condition of green construction projects, “the expertise and awareness of PMs” and “demand and support from stakeholders” has significant impacts on PMs’ job satisfaction. Furthermore, this study developed eight strategies to improve PMs’ job satisfaction, including “increase recognition opportunities for PMs”, “government incentives and financial support” and “introductory and training courses on green construction legislation and processes”. Originality/value The findings assist construction companies in formulating measures to improve the job satisfaction and performance of PMs in green construction projects.

Developing a research framework for the green maintainability of buildings

Facilities ◽  
2017 ◽  
Vol 35 (1/2) ◽  
pp. 39-63 ◽  
Author(s):  
M.Y.L. Chew ◽  
Sheila Conejos ◽  
Ashan Senel Asmone
Keyword(s):  
Health And Safety ◽  
Green Building ◽  
Green Buildings ◽  
Design Stage ◽  
Facilities Management ◽  
Knowledge Gap ◽  
Safety Hazards ◽  
Content Type ◽  
Research Framework ◽  
Novel Concept

Purpose The aim of this paper is to present a research framework for the green maintainability of buildings. This study makes the case for the development of a new concept called “green maintainability”. The paper also identifies and discusses the knowledge gap concerning green facilities management (FM). As an integral part of green FM, the economic, environmental and social impacts and opportunities of green maintainability throughout the total life cycle of the facility are also highlighted. Design/methodology/approach The little attention paid to the maintainability of green buildings has resulted in losses of lives due to occupational health and safety hazards as well as high operation and maintenance costs. To address this issue, this study has conducted a literature review to determine the relevant background knowledge and provides a conceptual framework that will aid in conceptualizing the green maintainability of buildings and the development of a research framework for the furtherance of this concept. Findings This paper finds that there is little research on the maintainability of green buildings, and the studies about the maintainability of green features are nonexistent in current research. This study confirms the knowledge gap of this little-researched area and draws from it the formulation of a research framework for the green maintainability of buildings to ensure green FM. Emerging literature on green practices and methods is currently receiving attention from academia, as well as building and construction practitioners, and can valuably contribute to the existing theories, practices and methods concerning building maintainability and facilities management. Originality/value This study develops the novel concept of green maintainability, which integrates maintainability and green FM at the planning/design stage. The proposed research framework is the first attempt to investigate the green maintainability of different typologies of buildings and especially green building technologies.

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