New York — Existing commercial real estate that does not undergo a “green retrofit” will relinquish market leadership within three years in terms of higher operating costs, lower productivity, declining attractiveness to workers and negative brand image, according to Deloitte’s The Dollars and Sense of Green Retrofits, a survey released on July 29, 2008.  The survey was co-authored with green real estate authority and consultant Charles Lockwood.

A green retrofit can help building owners and corporate tenants introduce green benefits into existing occupied facilities — whatever their size, age, location, use or ownership — in a prompt and cost-effective manner, with only minor impact on day-to-day operations. Findings from Deloitte’s survey of organizations that have undergone at least one LEED-certified green building retrofit include:      

• While savings from energy efficiency was a top goal, as cited by 75 percent of respondents, corporate environmental commitment was the leading motive.  Seventy-three percent of respondents reported an actual cost savings resulting from the retrofit.
• Ninety-three percent of respondents reported a greater ability to attract talent.
• Eighty-one percent of respondents saw greater employee retention.
• Eighty-seven percent of respondents experienced an improvement in workforce productivity.
• Seventy-five percent of respondents reported improvement in employee health.
• One hundred percent of respondents experienced an increase in goodwill/brand equity.

"The value of green retrofitting helps demonstrate that sustainability is rapidly becoming a critical business strategy," said Chris Park, leader of Deloitte’s Enterprise Sustainability service line. "This survey shows that green is more than just a reputational issue. It is clear to us that it is necessary for companies to implement a wide variety of sustainable practices in order to attract and retain talent and increase worker productivity. " 

“Despite the financial considerations in choosing a green retrofit over a conventional one, the overall benefits of green outweighed the costs enough for our survey respondents to be satisfied with their green retrofit projects,” said David Jacobstein, senior advisor to Deloitte’s Real Estate industry group.  “Somewhat surprisingly, benefits related to corporate image and employee relations were at least as important considerations as operational cost savings.”

“Green retrofits are the single most important measure that corporations and real estate owners can take to reduce their operating costs, raise commercial property values and achieve important environmental benefits like reduced carbon dioxide emissions,” Lockwood said. “New green buildings represent a minute percentage of the existing building inventory, and few corporations want to empty out a building for a conventional renovation. Green retrofits are the most successful, cost-effective procedure. Owners and investors who do not carry out green retrofits of their conventional buildings will be less able to compete in the marketplace as green buildings become tenants’ preferred choice and enjoy higher lease, occupancy, sales rates and property values compared to conventional buildings.”

Deloitte performed an on-line survey in 2007 of organizations that had carried out at least one U.S. Green Building Council (USGBC) Leadership in Energy and Environmental Design (LEED)-certified green retrofit using either the LEED-Existing Buildings (LEED-EB) or LEED-Commercial Interiors (LEED-CI) rating program.

A copy of the report is available on Deloitte’s website www.deloitte.com/us/greenretrofit and at Charles Lockwood’s website www.charleslockwood.com.