Do “Living Buildings” Make Economic Sense for Commercial Developers?

The Bullitt Center earlier this month lived up to its billing as the world’s greenest commercial office building. It earned certification through the Living Building Challenge after a year of operations in which the six-story, timber-framed edifice—and its tenants—consumed less energy than was generated by its rooftop solar array, drew no water from the municipal pipes, and discharged no waste or stormwater runoff to the sewers.

Now, developers of as many as six other commercial projects in Seattle are looking to it and the Stone34 building, which is pursuing a lesser but still ambitious Living Building certification, as models for both building to this new, rigorous standard of efficiency and sustainability (more on that below), and testing whether doing so makes economic sense.

Meanwhile, building officials and city planners from around the world are looking to Seattle as a model for ways to permit and encourage these complex projects with their multiple streams of social, environmental, and economic benefits. Seattle’s Living Building Pilot Program, the only one of its kind in the U.S., offers incentives such as increased heights and floor sizes for buildings that use dramatically less energy and water than the existing standard. The incentives, say real estate watchers, plus the example of two completed projects in the city, are helping encourage more developers to explore high-performance buildings.

The developers behind the Bullitt Center—including Earth Day co-founder Denis Hayes, CEO of the environmental nonprofit Bullitt Foundation—see the Living Building Challenge certification as a milestone worthy of celebration. Because it is indeed a challenge to create a functional, desirable structure that has as close to zero environmental impact as anything of its kind on the planet.

But they won’t consider the Bullitt Center a success until it is emulated by commercial developers who have to answer to market forces and investors—not just by other nonprofit groups aligned with the social and environmental goals embodied by the Living Building Challenge, and property owners positioned to hold a building long enough to receive a full return on investment in systems like on-site waste treatment and automated, operable windows.

That’s why the Stone34 building, which has received less attention than the Bullitt Center, is an equally compelling example—and perhaps more so in a commercial context. Global development and construction giant Skanska built the 130,000-square-foot, five-story structure to achieve a partial Living Building certification, which will still make it one of the most energy-efficient commercial office buildings anywhere. Skanska sold the building—headquarters to Brooks Sports, an active participant in the deep-green development—late last year for a substantial profit.

Can other commercial developers expect a similar financial return? It is difficult to tease apart the various motivations, benefits, and incentives embedded in each of these projects. But the Bullitt Foundation is trying to make as much information available as possible. This month it published a detailed financial breakdown of its experience building the Bullitt Center, and has taken countless meetings with developers, government officials, and the general public.

“As our experience builds, we’re trying to be absolutely transparent in every aspect of the building,” Hayes says.

Hayes
Hayes

Bullitt Financials

The 52,000-square-foot Bullitt Center, built on an odd-shaped, sloping parcel in the dense Capitol Hill neighborhood of Seattle, cost $32.5 million, or $625 per square foot. The Bullitt Center’s analysis says this all-in cost (including $3.4 million for the land) is similar to comparably high-performance buildings, and up to 30 percent more than a standard code-compliant office project with no extra environmental amenities.

The Bullitt Center has an amazing array of green amenities, from geothermal heating and cooling to composting toilets to a third-floor terrace garden that treats and disperses greywater (wastewater not from toilets).

The center’s financial analysis (PDF) also notes the difficulty of

Author: Benjamin Romano

Benjamin is the former Editor of Xconomy Seattle. He has covered the intersections of business, technology and the environment in the Pacific Northwest and beyond for more than a decade. At The Seattle Times he was the lead beat reporter covering Microsoft during Bill Gates’ transition from business to philanthropy. He also covered Seattle venture capital and biotech. Most recently, Benjamin followed the technology, finance and policies driving renewable energy development in the Western US for Recharge, a global trade publication. He has a bachelor’s degree from the University of Oregon School of Journalism and Communication.