Are green office towers becoming the norm, not the niche?
July 16th, 2012 Tyler Hamilton
Yes, all of those new office towers being built around downtown Toronto are messing up traffic, and the construction cranes jutting out of the skyline like garden weeds are a temporary eyesore.
 The good news is these buildings are becoming greener and smarter – both in the way they are constructed and how they operate.

Not to suggest tower developers suddenly have environmental religion. Profit still drives their activities. But there is change happening in the world of commercial building construction, and while for some it could move faster and stretch deeper, the fact that efficiency, environmental footprint and tenant well-being are being factored into design is a good thing.

Last month, Oxford Properties, the real-estate arm of the Ontario Municipal Employment Retirement System, revealed that it and its partners will spend an additional $500,000 to achieve “LEED Platinum” certification for the RBC WaterPark Place tower they are building on Queens Quay, between Bay and York Streets.

The building will be cooled using cold water pumped in from Lake Ontario. Special glazings will be put on windows to allow for more natural light while improving insulation. Pumps that drive ventilation, heating and cooling will be more efficient, and tenants will have more control over lighting and climate within specific rooms or “zones.”

LEED (Leader in Energy and Environmental Design) is a standard that at its simplest certifies the greenness of a building. The highest certification is platinum, and RBC WaterPark Place – to be the new headquarters for Royal Bank of Canada, which is taking up two-thirds of the 930,000 square foot tower—will be the first in Toronto to achieve that status.

Projected total cost: $400 million.

It won’t be alone for long. The reality is that few new office towers in Toronto and other major urban centres don’t have some level of LEED certification, whether silver, gold or platinum.

It’s become a bit boring really. Reminds me of when retailers started launching e-commerce sites on the Web during the dot-com boom. The first few were interesting. After that, it became more newsworthy if someone (a laggard such as Hudson’s Bay Co., for example) wasn’t selling online.

Commercial developers are realizing two things: tenants are taking corporate social responsibility more seriously and increasingly demanding more sustainable, healthier office spaces; and the cost premium for meeting that demand can typically be recovered in a few years.

“It’s becoming very much part of our industry,” said Blake Hutcheson, president and chief executive of Oxford. “This whole movement by Oxford and others to make our buildings greener, smarter, more efficient, I would characterize as an unequivocal win, win, win.

“Tenants win because they want it and are the net beneficiary of being in a much better building in terms of the environment, quality of work, and usability. Your investors win because, unless you get really leading-edge with your approach, there are arguably pretty good paybacks and it does make your building more valuable.”

More valuable because operating costs related to water and energy use are much lower, and in urban centres like downtown Toronto building owners can lease out spaces at a premium.

Hutcheson said Oxford benefits internally as well. “We hear more and more that our people want to be with a company that’s branded for doing good things, not doing yesterday’s stuff. As a result, we’re attracting really bright, really capable people who are inspired by some of the things that we’re doing.”

Empowering tenants to adjust their own behaviours is also a growing trend. Cadillac Fairview recently launched a new “green portal” for the six towers that make up its Toronto-Dominion Centre. It’s basically a website dashboard that lets tenants track and compare their respective energy use.

David Hoffman, the centre’s general manager, said it’s an effective application of the “manage what you measure” principle.

In many ways it’s about taking a more holistic view of building design and construction, one that takes into account the availability of technology to digitally connect together building components or systems that previously existed in silos.

With that big-picture view, combined with building automation and greater tenant and building manager control, these new commercial towers rising above Toronto are truly becoming smarter.

Earlier this month, Cisco Canada held an industry roundtable to discuss this very issue. The executives who spoke, representing construction, engineering and commercial property management companies, all agreed that the trend is real.

“The fact we’re here in a meeting with Cisco would be unheard of 10 years ago,” said Armin von Eppinghoven, executive vice-president of MMM Group, one of the largest engineering and consulting firms in the country. “We’re in the middle of a transition that in the next little while should become clear.”

Mind you, that doesn’t address what we do with all the older, less efficient buildings that represent the bulk of the city’s inventory. As Hutcheson pointed out, new buildings are only a tiny – “quite novel” – percentage of the whole.

Julian Brandon, senior vice-president at commercial real-estate consultant DTZ Barnicke, said more tenants want the LEED-type standard, convenient amenities and closeness to public transit.

There is a “musical chairs” of real estate going on, he added. “The older buildings are being left behind. What are those old buildings going to do?”

A good question we should be trying our best to answer.


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