Sustainability as a Market Advantage
In my research and writing on the topic of sustainability, I look for examples of developers or owners who are fully motivated to build a sustainable building because of an overriding economic reason to do so.
Sure, there are visible stories about owners who build “green” because it is “the right thing to do”, and some tout that energy savings to the tenants will add attractiveness to sustainable buildings, but those savings seem quite undefinable in a way that will motivate the tenants to pay higher rent.
When a developer puts pencil to paper (or runs a spreadsheet), analyzes the cost of sustainable construction, the current leasing market conditions and the projected ROI, and nevertheless determines that the building will be economically viable and will give the developer a definable market advantage over others, then and only then will sustainable building have a chance of thriving.
A few months ago, I interviewed Craig Ustler, a savvy urban developer with a very clear and practical understanding of the “why” and “when” of sustainable building construction. His seven story commercial office building, named the “GAI Building” for the engineering firm (GAI Consultants) which is the major tenant, just opened this month in downtown Orlando.
The GAI Building has four floors of rentable commercial office space, three levels of parking and a lower floor for retail and restaurants. The top floors will house GAI Consultants. For economically defensible reasons, Ustler decided to seek a LEED Silver certification, although as I’ll describe below, he isn’t all that enamored with LEED standards.
Ustler is the President and Owner of Ustler Development, Inc., a real estate development company, and is Vice President of Ustler Properties, Inc., a commercial real estate brokerage company. He is also President and principal of Creative Village Orlando, LLC, a potential re-development project on the site of Orlando’s newly-replaced arena. For the past several years, Ustler has concentrated on urban infill projects. He holds a Master’s Degree in Real Estate and Urban Analysis from the University of Florida, and a Bachelor of Arts in Economics from the same school.
Ustler sees his choice of building to LEED Silver in terms of practical market advantage. He maintains that the GAI Building creates for his company at least two competitive advantages over other available space in the downtown Orlando market.
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