Question

In: Operations Management

What do you think are some key reasons that an owner would want to seek LEED...

What do you think are some key reasons that an owner would want to seek LEED certification and why? Do you think the up-front costs will yield a return over the life cycle of a building, if so, how?

Solutions

Expert Solution

LEED (Leadership in Energy and Environmental Design) certificate is a green building certification that is provided to the builders who aim for sustainability through energy savings, water efficiency, carbon dioxide emission reduction, and improvement in the indoor environment of a building.

The reasons for seeking LEED certification:

LEED certification helps the builders to contribute to environmental sustainability. A building requires designing that reduces the consumption of scarce resources and maintenance for long term sustainability. LEED certification is a third party certificate issued to environmentally friendly buildings. It creates a positive image of the builder and increases the chances of better revenue from selling. Moreover, the builders get tax incentives for building LEED certified buildings. So it is beneficial for the building owners to get LEED certification.

Though green buildings need 2-6 percent more cost than traditional buildings, the costs will yield a return over the life cycle of the building. According to Burger, LEED certified building has higher lease-up rates. Moreover, LEED certified buildings have higher property value over time than other buildings in the same area and lower insurance premiums, which make the buildings worth over the life cycle of the building.


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