How to LEED

Randall M. Griffin

Randall (Rand) M. Griffin, CEO of Corporate Office Properties Trust (COPT), a real estate investment trust (REIT) headquartered in Columbia, Md., will be honored with the 2011 Business Leader of the Year Award by Loyola University Maryland's Sellinger School of Business and Management on Nov. 16. The Sellinger School has honored a Business Leader of the Year since 1983, recognizing those whose vision, dedicated effort, and singular commitment to the highest ideals of business have distinguished them and their organizations as among the very best in the nation. Griffin's extensive experience in commercial real estate dates back nearly 40 years and he and COPT are particularly committed to sustainability initiatives. We sat down for a Q&A with Griffin to learn a bit more about his initiatives and his vision for the company.

When did you start focusing on Leadership in Energy and Environmental Design (LEED) certification in your projects?

We started that in the beginning of 2003. We wanted to do two things: 1) Ensure all buildings we built going forward would be a minimum of LEED Silver, the second certification level, which we've accomplished; and 2) 50 percent of all of our buildings would be LEED certified by the end of 2015. These were two very visionary goals back then. Not that many people were doing LEED.

Why did you do it?

There were several reasons. The first was that it was the right thing to do. This program was something we could implement to help improve the environment.

Not only did we feel it was right, but we felt a responsibility to lead the way—we were well-regarded in the industry and performed well and we felt that if we did it, others in the industry would follow. We also felt that our tenants would follow. You see, we do the shell building, which is at least LEED Silver-certified, and the tenants need to commit to making the interiors LEED.

Third, we felt that over time, LEED-certified would become like sprinkler systems, it would be an industry standard, and we wanted to be at the forefront of that. We do think companies like us will be worth more for investors interested in investing in the environment. And finally, in 2006 we created our ‘core purpose’ along with what we call The COPT way: Creating Environments That Inspire Success. When I define environments it is broad-based—from our art programs, large trees we’re planting in our building communities, and charitable activities—LEED is part of that definition of who we are.

What are some other green or sustainable initiatives you have implemented at COPT?

We’ve implemented a number of new technology and operations in our buildings, including Regenerative Stormwater Conveyance Systems and bioswales, some of the first ones in the state. Building lighting systems are now designed to use less than 1 watt per square foot versus a previous standard of 3 – 4 watts. We use rainwater cisterns for collection and irrigation during summer months as opposed to potable water irrigation systems. We are also using drought-resistant materials, solar powered electric charging stations for vehicles, and “smart irrigation systems,” which utilize satellites and computers to monitor ground moisture to minimize irrigation cycles. 

We have also entered the majority of the buildings in our portfolio in Energy Star and started operating all of our buildings—whether they are LEED-certified or not—with green initiatives, whether it’s recycling programs, energy saving lights, or environmentally friendly housekeeping products.  

What did you discover about the initiatives’ impact on your business over the years?

Over the years several things happened. The communities that we worked in were interested in encouraging these initiatives so they started a carrot and stick approach where they mandated all buildings over 50,000 feet were required to be LEED-certified and if you went to LEED Silver, you would get a tax rebate of 50 percent. If you went to Gold you would get a rebate of 75 percent, and Platinum a rebate of 100 percent over five years. If you were still running at that level, after five years you’d get a rebate at half of that level for another five years. We actually helped write some of the legislation for these programs–it’s been sort of a grassroots approach. Insurance companies also began giving a 10 percent rebate for LEED certification. Employees who work in green buildings tend to be healthier and better motivated—there’s a 30 percent higher productivity rate. We also discovered at the LEED Gold level (50 percent of our LEED-certified buildings), the savings were 40 percent on energy, and 50 percent on water. Interestingly, some of our projects have been held up because of water availability. Water determines sewage and it can be a limiting factor for building capacity on a site. Over time, if you have access to water, it proves out that you will be able to build a higher density facility and it makes the building more valuable.

Our green operating initiatives really encourage others to be involved. And frankly, the younger employees that corporations have hired have begun demanding these initiatives. We believe employers will begin to find that sustainable and socially responsible practices will attract and retain new talent.

What do you see as the biggest misunderstanding about sustainability initiatives?

I think perception has come a long way in the last seven to eight years. In the beginning, it was “Oh, those greenies.” But, I think that as people see savings and health benefits, they want to be involved and understand the importance. People start to find that it’s not as difficult to implement as they thought.

Another is that it is more difficult. They do keep raising the standards.  For instance, a LEED Gold building two to three years ago would only be Silver today. Yet, with tenants, it’s become much more cost-effective over the years. Beginning hard cost is 1.5 percent (Gold) and 0.75 percent (Silver) additional investment.  A lot of people guess hard costs are much higher, in the 10 – 20 percent additional investment range. 

Another misconception is: going green is ugly. This isn’t the case. I think we’ve proven that wrong in the industry. Tenants found that the materials are very attractive; there are a lot of options.

Are there any other companies or people who are doing something really interesting in the area of sustainability or green building?

A lot of development companies are beginning to rehab buildings to be LEED-certified in markets like California. PNC Bank is ensuring its branches are LEED-certified. As a community, Chicago is one of the most advanced cities I’ve seen…New York City is catching up and implementing a series of programs. But, as a company, we really are at the forefront; we are among the top owners of office buildings that are LEED-certified in the country. We take a lot of pride in that.

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