Colorado Real Estate Journal - September 21, 2016
LEED Dynamic Plaque is gaining some traction with commercial real estate owners and management companies and may bring changes to the market. First, LEED O+M projects are the only certifications that expire – LEED Core & Shell and LEED New Construction certifications have no official expiration date (their certifications “expire” only when significant building renovations occur). Expiring O+M projects have three choices: follow the path for LEED recertification, “start over” with a new threemonth performance period, or use LEED Dynamic Plaque. Depending on the project, the five-year cost to use LEED Dynamic Plaque may be 20 to 65 percent of the cost of using LEED O+M. Secondly, we’ve seen that LEED Dynamic Plaque scores tend to track fairly closely to what would be achieved using traditional LEED O+M. Suburban buildings that earned LEED Certified or LEED Silver are tending to achieve LEED Silver with Dynamic Plaque. Urban buildings that earned LEED Silver or LEED Gold are tending to achieve LEED Gold with Dynamic Plaque. However, we have also seen that changing the number of building occupants can swing the score quite dramatically … so, it is still possible that significant changes in occupancy can produce the result of different levels of LEED certification year over year (as the score recertifies the building annually). Therefore, if it is critical that a building maintain its LEED Platinum status, it may be worth the cost to use traditional LEED O+M to secure LEED Platinum for the next five years. If the owners just want the building to be “LEED something” (i.e. it doesn’t matter if the building is LEED Silver or LEED Gold), LEED Dynamic Plaque is a more cost-effective way to keep the certification. Finally, LEED Dynamic Plaque can allow projects to focus budget dollars appropriately. There are five tracks for LEED Dynamic Plaque: energy, water, waste, transportation and human experience. If building energy performance is strong, the building will have a high score on the energy track. To pursue traditional LEED recertification, actions would still need to be taken to fulfill the energy prerequisites. For example, an ASHRAE Level I energy audit and walkthrough will still need to be performed, even if a building has an Energy Star score of 95. With LEED Dynamic Plaque, no actions would be required as the performance is simply captured in the score, which is based upon the energy bills, square footage and occupancy. Once the information is entered and the scores from each track are obtained, projects can focus their improvement efforts. If the water performance score is low, for example, the management team can decide if turf reduction can be implemented over time to reduce irrigation water use and improve the score. If the waste score is low, effort can be put toward conducting a waste audit or working with tenants to ensure recycling containers are available at each desk, kitchen, copy room and conference room. Now, the big news is for buildings that are not yet certified for LEED and those that are not yet built. Existing, occupied buildings that are not yet certified for LEED O+M can opt into LEED Dynamic Plaque if they fulfill and document the LEED v4 O+M prerequisites. This includes policies and plans, plumbing fixtures that largely meet Energy Policy Act flush and flow rates, building energy and water meter documentation, an ASHRAE Level 1 audit and walkthrough, an Energy Star score of 75 or higher, no CFC refrigerants (or no leakage), outside air testing for ASHRAE 62.1 compliance and no smoking signage at all building entries. The next wave of game change may be on the construction market, where LEED certification has almost become expected for Class A buildings in metro Denver. LEED can add approximately 2 percent to a construction budget, according to a survey of 146 projects by Good Energies. Although an incremental percentage, this can translate to significant dollars for larger projects. Some developers may choose to forego LEED for New Construction certification and simply opt into LEED Dynamic Plaque after occupancy. What will this mean for the construction market? The theory behind LEED Dynamic Plaque is that it captures performance. So, even if developers bypass the construction certification, green features and energy efficiency must still be incorporated into the project to meet the prerequisites and at least 40 points for LEED Dynamic Plaque. However, what will this mean for the markets that have developed for certified wood, rapidly renewable products, materials with recycled content, local materials, protecting habitat during construction, rainwater management, light pollution reduction, construction waste management, commissioning, demand response, advanced energy metering and green power? None of those are captured by LEED Dynamic Plaque. The concern is the significant market transformation we have seen from LEED over the past decade, particularly with green materials and supporting the green power market. Several jobs have been created simply to complete LEED documentation from the construction process. In regard to LEED Dynamic Plaque, only time will tell.