Project Scenario
Project Concept:
20,000sf LEED-certified
commercial building - New Construction
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| Developing and owning a green-certified office building delivers higher ROI. This model shows typical costs and revenues for a green-certified building compared to a conventional building. The Bottom Line: a green-certified commercial building delivers a higher "cap rate" with lower operating expenses, and has a higher market value than a conventionally constructed building. Many other benefits are highlighted, below. |
Conceptual Financials |
| |
| LEED-certified building |
Conventional building |
| 20,000 |
Floor area [sf] |
|
20,000 |
Floor area [sf] |
| $3,287,000 |
Construction cost estimate {a} |
|
$3,167,000 |
Construction cost estimate |
| 300,000 |
Land purchase {b} |
|
300,000 |
Land purchase {b} |
| 220,000 |
Development fees {c} |
|
220,000 |
Development fees {c} |
| $3,807,000 |
Total project cost |
|
$3,687,000 |
Total project cost |
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|
vs. |
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|
|
| $304,000 |
Net Operating Income {d} |
|
$260,000 |
Net Operating Income {d} |
| 8.0% |
Cap rate |
|
7.1% |
Cap rate |
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|
|
| $5,280,000 |
Projected selling price {e} |
|
$4,570,000 |
Projected selling price {e} |
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Let us show you how a high-performance,
green building can improve your bottom line ! |
The Benefits Include: |
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COMMERCIAL OWNER
Potential for increased top-line revenue.
Healthier indoor air quality.
Increased employee productivity.
Increased sales for retail stores.
Reduced absenteeism and attrition.
Reduced personnel overhead.
Improved financing conditions. |
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DEVELOPER
Reduced O&M expenses.
Rent premiums.
Reduced vacancy.
Increased market value.
Financial incentives.
Better risk management.
Enhanced market competitiveness.
Improved financing conditions.
Higher ROI and cap rate. |
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COMMUNITY
Reduced construction waste.
Improved storm water
management.
Reduced pollution.
Cooler summer temperatures.
Increased property values.
Enhanced community
reputation.
More wildlife habitat. |
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NOTES:
{a} Estimated unit cost is based on 2007 market data. In addition to the "green" components and systems, this includes high-quality commercial finishes, plus typical fixtures and equipment.
{b} Land requirement assumes compliance with zoning setbacks and area coverage, plus surface parking at 4 spaces per 1000sf. This model assumes half an acre of undeveloped land with basic utilities in place.
{c} The estimate of development fees include mortgage loan origination fees, construction bridge financing (at 7.25%), and marketing.
{d} NOI is net of taxes, insurance, maintenance, repairs, management fees, utilities, vacancy allowance, credit losses, and cleaning, and reserves.
{e} Projected selling price is in 10 years assuming an 8% cap rate. |
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