Metro Atlanta ranks fourth nationally on a green building adoption index, according to a report by CBRE that also revealed a slump in the national growth rate of certification for sustainability or energy efficiency in office buildings.

Three Alliance Center is expected to be LEED Gold or Platinum certified when it opens in 2016, providing a highly sustainable office building to the Buckhead market. Credit: tishmanspeyer.com

The report arrives almost three months after the city of Atlanta enacted its first mandatory sustainability program for commercial buildings.

During debate over legislation proposed by Atlanta Mayor Kasim Reed’s administration, some in the industry said the free market was working just fine in prompting owners to improve sustainability. Atlanta officials concurred that some companies were leaders, and contended the rest needed policies from the government to improve their buildings’ sustainability.

The CBRE report observed across-the-board decreases in building certification nationwide, by a fraction or so of 1 percent. The authors presume that building owners have harvested all the low-hanging fruit. The remaining buildings present challenges to efforts to improve the efficiency of water and energy usage.

The report also touched on one policy that caused some concern in Atlanta’s new sustainability ordinance – benchmarking and disclosure. The report said future reports will examine the impact these two regulations have on certification.

Atlanta’s ordinance requires owners to collect the energy and water usage of their buildings, in a practice called benchmarking. This information is to be made public, through the ordinance’s disclosure component.
The report observes that the dip in certification doesn’t mean buildings are performing worse than before, and continues:

Most of metro Atlanta’s collection of green buildings is located north of I-20. Credit: CBRE

• “Rather, it reflects the fact that only a certain fraction of the building stock can obtain a sustainability or energy-efficiency certification. And perhaps it also indicates that the fraction that can seek certification has now done so. The most sophisticated owners with the most high-profile buildings in Tier 1 markets have pursued and achieved certification.”

The U.S. office market has an estimated 12 billion square feet of office space, according to research released in 2010 by CoStar Group, Inc. and the University of San Diego.

The CBRE report noted the following certification rates in the top 30 markets it evaluated:

• ENERGY STAR label, LEED certification, or both: 13.1 percent, down from 13.8 percent;
• Measured by square footage: 38.7 percent, down from 39.3 percent;
• CBRE determined the decreases stemmed entirely from a decrease in ENERGY STAR labels: 9.7 percent, down from 10.8 percent.

Metro Atlanta fairly glowed in the new report, which was initiated by CBRE, a commercial real estate management firm. CBRE worked in partnership with Maastricht University, a Netherlands-based institution with a real estate group; and Real Green Research Challenge, which CBRE formed and provided $1 million to conduct such research, according to the report.

Atlanta Tech Village was cited in the CBRE report as an example of an extensive rehab project that resulted in a sustainable, efficient building. Credit: atlantatechvillage.com

The region was touted in two distinct observations – strong certification levels in existing buildings, and future buildings that are expected to be efficient.

In terms of existing buildings, the report’s authors observed:

• “The Atlanta market continued to demonstrate strong adoption of green building practices during 2014 and now boasts 264 qualified buildings, a net gain of 20 buildings over the prior year,” the report states. “With 29 percent of all buildings now qualified, Atlanta moves past Minneapolis as the market with the highest percentage of green buildings. Atlanta also leads in the number of ENERGY STAR-labeled buildings at 24.6 percent, joining Minneapolis as the only two markets to break the 20 percent barrier. Finally, Atlanta is third in the number of LEED- certified buildings at 8.7 percent.”

In terms of future buildings, the report observed:

• “In 2014, Atlanta remained third nationally in the number of Fortune 500 firms headquartered in the metro area. Pulte Group’s headquarters became the sixteenth of those company headquarters in 2014, taking 101,000 square feet of space in Buckhead’s ENERGY STAR-labeled Capital City Plaza. Mercedes- Benz and Porsche also recently announced new North American headquarters in Atlanta, and the new Porsche facility that is currently under construction will be built to a LEED Silver or higher certification. Mercedes-Benz is expected to construct an office tower in the Central Perimeter submarket that will be ENERGY STAR and LEED certified.
• “Ponce City Market is a 1920s-era building that is being renovated to achieve a LEED Core and Shell Silver certification. Alliance Three, the next high-rise office tower to be completed in the Buckhead submarket, will be delivered in 2016 and is expected to achieve a LEED Gold or Platinum certification. Atlanta has also continued to establish itself as a vibrant technology hub, attracting environmentally conscious tenants in the process. Avalon, a mixed-use development in North Fulton, planted more than 2,500 trees during development, while the Atlanta Tech Village achieved a LEED certification after extensive renovation in 2014 and has attracted many technology start-ups.”