â€œYou have to pay attention to climate change,â€ Sally Wilson tells me. â€œLook at Katrina, as an extreme example. Itâ€™s going to impact our business.â€
Wilsonâ€™s business is commercial real estate. Already, itâ€™s a business where concerns over global warming in particular and the environment in general are having a big impact. Youâ€™ve probably heard that Bank of America and J.P. MorganChase are building high-profile LEED-certified buildings in Manhattan. But did you know that there is a LEED-certified McDonaldâ€™s in Savannah, Ga.?
Recently, I met with Wilson, who is the first LEED-certified real estate broker in America, in Washington, D.C., where she is based. A few days later in New York, I met Martin Melaver, a Savannah developer who built that green McDonaldâ€™s. I came away from both conversations with a strong sense that the commercial real estate business is in the midst of a transformation, as it embraces the idea of green building. This is good news, of course, and it’s emblematic of the scale of change that will be needed to address climate change. While it’s fine when individual companies go green, it will take the transformation of entire industries — like real estate, electricity generation, autos, etc. — to have a meaningful impact.
Hereâ€™s a revealing real estate snapshot: Today, there are only about 1,000 LEED certified buildings in the U.S. But another 15,000 are in the pipeline, according to Sally Wilson. â€œThe tipping point is climate change,â€ Sally says. LEED, which stands for Leadership in Energy and Environmental Design, is the nationally accepted benchmark for green buildings developed by the nonprofit U.S. Green Building Council.
Trained as an architect, Sally has a big-picture view of the industry because she is global director of environmental strategy for CB Richard Ellis. With $4 billion in annual revenues in 2006, CBRE is a real estate giant without about 26,000 people in 400 offices in 50 countries.
She primarily works as a broker who represents tenants. In that role, she tries to persuade her clients that there are benefits to seeking out commercial space which has been built or renovated to save energy, waste and water consumption. Such buildings, she argues, also help increase worker productivity because they are often more appealing places to work, with natural light and fewer chemicals. Sheâ€™s making lots of headway with her clients, she tells me.
While most green building activity up to now has focused on new construction, lately thereâ€™s been an upsurge in LEED-certified renovations. Law firms, for example, are embracing green buildings, not so much because the partners really care about it, but because younger lawyers do, and top law firms are all about attracting the best talent.
Wilson, by the way, is part of a green power couple in Washington. Her husband Ken Wilson leads an architecture firm, Envision Design, whose recent projects World Wildlife Fund headquarters, the Greenpeace USA headquarters, the Washington, DC office and New York headquarters of Environmental Defense, and the headquarters for Conservation International. Quite an impressive list!
Martin Melaverâ€™s got some impressive credentials, too. He leads a family business called Melaver Inc. that began nearly a century ago as a corner grocery, grew into a chain of supermarkets and morphed into real estate after the food business was sold to Kroger in 1985. Today, Melaver Inc. builds only sustainable buildingsâ€”meaning those that make money and deliver environmental and social benefit. â€œWe view ourselves as an EnveloperÂ® – enveloping our community in a fabric of innovative, sustainable, inspiring practices,â€ the company says.
While the Mickey Dâ€™s in Savannahâ€”with lots of natural light from windows, a bike rack, preferred parking for hybrids and super-efficient heating and air conditioningâ€”is a fun story, more significant is a Melaver project called Sustainable Fellwood that will include public, affordable and market-rate multifamily housing as well as seniors housing, single-family homes, retail and commercial space, organic community gardens and green park space. Doing â€œgreenâ€ public housing marries the social and environmental values of Melaver, Martin told me. The $50 million project could help disprove the conventional wisdom that LEED housing has higher upfront costs. “That’s an urban myth,” Martin says.
Martinâ€™s not your typical real estate developer. Before joining the family business, he earned a B.A. from Amherst, a MA and PhD in English and American literature from Harvard, and a Fulbright fellowship to Tel Aviv University. He was headed for a teaching career until he spent two years with a friend traveling in Africa which, he told Grist, â€œchanged my life in ways I’m still coming to terms with.â€
Iâ€™m expecting both Sally and Martin to speak about green building at Brainstorm Green, a conference on business and the environment that Iâ€™m organizing for FORTUNE. At the Brainstorm Green website (which is still under construction) you can see a up-to-date list of speakers or request an invitation to the event.