June 22, 2009
Q&A: Sally Wilson on the USGBC Headquarters, LEED Fine Print, and Negotiating a Green Lease
The USGBC’s new headquarters are housed in a renovated 1970s office building, for which Wilson negotiated a green lease. Photo: Larry Olsen/courtesy Envision If green building is to ever become mainstream (and, trust me, it’s not even close today), it will need people like Sally Wilson working behind the scenes. A trained architect, Wilson is […]
The USGBC’s new headquarters are housed in a renovated 1970s office building, for which Wilson negotiated a green lease. Photo: Larry Olsen/courtesy Envision
If green building is to ever become mainstream (and, trust me, it’s not even close today), it will need people like Sally Wilson working behind the scenes. A trained architect, Wilson is a real estate broker in the CB Richard Ellis (CBRE) Washington office, and the firm’s global director of environmental strategy. She had the distinction of being the first real estate broker in the world to be LEED accredited. Since green building will never become business-as-usual unless business itself signs onto it, this was a very significant first. Wilson served as a real estate consultant for the USGBC’s new headquarters–her husband Ken’s firm, Envision Design, created it–helping to negotiate its green lease. Recently I spoke to her about the USGBC, her work with the real estate behemoth CBRE, and the next frontier for green building.
Let’s begin at the beginning. What is a “green lease”?
We think of it as LEED integration into the lease. When we begin the process with a client who is pursuing sustainability, we start by sending out a general RFP to landlords, and we attach an additional rider to it, which is an environmental-qualification statement. This rider is structured around opportunities for the building to pursue LEED credits. It’s roughly twenty-five points. It varies depending on the location, but we customize it for each tenant.
This is for buildings that haven’t pursued LEED certification?
Right. Most buildings are existing stock, so we need to evaluate those, to make sure that you can even do LEED. Because there are prerequisites and if you don’t meet those, then LEED is a non-starter.
What kind of things would constitute a LEED non-starter?
The first thing is: You can’t have HFOCs [hydrofluorocarbon refrigerate systems], which are ozone depleting. They can’t be in any of the mechanical equipment. You need to comply with ASHRAE‘s fresh-air requirements and their 2007 energy requirements. You must be a smoke-free building and have a recycling program.
These are all prerequisites, before you deal with any LEED fine print?
Correct. And now the truth is, these are our prerequisites too, because if a building doesn’t comply with those it’s very expensive to retrofit. There are other credit opportunities as well. We’re adamant about self-metering, about buying green power.
The USGBC, for example, wanted PVs on the roof, so we had to negotiate roof rights. Typically, we negotiate the price for satellite roof rights, but PVs have a bigger footprint, so we wanted to make sure that got written into the lease. We looked to ensure that the building would change out water fixtures to either low usage or self-flow electronic sensors. We also mandated that the base building pursue LEED for existing buildings, customizing our proposal to say, “These are the things we’re looking for, please respond if you can comply.”
“Once you get in there and educate the landlord, they realize that this doesn’t really cost more and makes the building more marketable. It’s all about market transformation.”
It sounds as if the landlord wanted the USGBC. Did you feel like you had a bit of leverage?
Yes, they clearly wanted the USGBC, but my partner, Pat Marr, and I had done a number of LEED transactions for CBRE. For the first one we did, in 2004, we negotiated the submetering, bicycle storage, recycling. They didn’t have LEED for Existing Buildings then, but we negotiated all of that into the lease. And what that does is, if the building changes hands, it ensures that for the long term the building has compliance in these sustainable initiatives.
It’s almost as if you’ve turned that building over.
That’s what’s great about it. Once you get in there and educate the landlord, they realize that this doesn’t really cost more and makes the building more marketable. It’s all about market transformation.
When you turn a building green, what happens to the existing tenants who weren’t green? What kind of work do you have to do on them?
You don’t have to do anything on them. They benefit from what the building does.
By paying less for energy, less for water?
It depends on how the lease is structured. For instance, our lease is structured in a way where we submeter and only pay for energy used. So it incentivizes us to invest in better lights. We have daylighting controls and sensors, of course. The USGBC has the same thing; they’re using a half a watt per square foot on lighting. If you submeter and pay only for direct use you can get that kind of benefit. We’re just finalizing a study of our own spaces: We used 40 percent fewer kilowatt hours in 2008 than we did in 2007, and that translates to dollars–but it also translates to carbon emissions, because CB Richard Ellis has a carbon-neutral commitment by the end of 2010.
Are you going to get there?
We’ll get there.
2010 is next year.
I know, but you can get to carbon neutral by buying offsets and using renewables. We will ultimately have to do that. But we can reduce our own kilowatt consumption and establish better protocol and operations within the office to reduce that footprint automatically. Now this is only for our own offices. This is not for all of the billions of square feet of property that we manage. But we do engage our tenant owners in conversations about how to make those types of reductions in their own operations.
“Suddenly climate change got connected to green buildings, and that’s when it all changed.”
What was your route into this?
I practiced architecture for eighteen years. Pat was on the brokerage side, and we did a lot of strategic-planning work together. In 2003, he asked me to come over to CB. We do tenant brokerage. When I started here, my husband, Ken, who had been doing green interiors since 1999, said to me, “You have a great opportunity to step into the brokerage world and make a change because the brokers are not getting it with the green thing.”
Six months into it I had to sit down with my managing partner and lay out a business plan for the next year. I told him, “I want to get into this green thing”–this was December 2003–“I want the company to join the USGBC. I also want to become LEED AP [accredited professional].” When we began working on LEED integration assignments, Pat and I quickly realized that our competitors didn’t have a clue. They were poo-pooing sustainability. Then in at end of 2004, I was asked to join the LEED Core & Shell steering committee as the brokerage representative. Pat is very senior at the company and knows everybody in it. As his partner I got to meet everybody and they asked me what I was doing, and I would talk to them about green building and they kind of looked at me cross-eyed. But in 2007 everybody reached out and said, “We need to get our arms around this as a corporation. We’re writing our corporate social-responsibility report, can you help us understand this?” So me and about sixteen other people at CBRE–at the time we had about thirty thousand employees–were asked to join a global task force to help define what sustainability meant to the company. This was the launch of our carbon-neutral initiative.
It seemed to go from fringe to mainstream almost overnight. What finally changed?
If you look at the evolution of the green movement, 2006 was a critical year and made the whole initiative tick. Three things happened in that year. The first thing was, An Inconvenient Truth came out. The second thing was, LEED for Core & Shell came out, so now you had a tool that developers and brokers could latch onto to change market initiatives. The third thing was the Nobel Prize that Gore and the UN got for climate-change awareness. Suddenly climate change got connected to green buildings, and that’s when it all changed.
It seems to have picked up steam. And what’s important about the USCBG headquarters–especially in this economic climate–is it’s an existing building. That’s where the green-building movement will have to move.
Absolutely. Two years ago I sat down with Chris Smith at the USGBC. We were ready to sign on to the LEED Existing Building program. At that point they had fifty-nine buildings in the program. Fifty-nine buildings in the entire world. CBRE has over ten thousand buildings in the United States alone. I said, “Do you know what we’re going to do to you if we sign onto this?” And his eyes just got huge. That’s when they started to think about the growth of the organization. You’re right. The growth will be in existing buildings. There is seventy billion square feet of commercial office space out there in the U.S. And less than one percent is LEED certified.