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How Building Green Can Help Your ‘Triple’ Bottom Line

June 2013

Merritt Properties Co-Director of Leasing, Lou Boeri, admits when Merritt first started looking into green building nearly a decade ago, they were evaluating it more for marketing purposes than as environmental stewards. But as the Merritt team started to learn more about sustainability, they quickly realized that it mattered far more than just a marketing tool. Rather, Boeri says it fits perfectly with the triple bottom line management philosophy of people, planet and profit because typically, the most forward-thinking companies are the ones who are embracing this technology.

Merritt Properties’ green buildings dot the state: Schilling Green II in Hunt Valley, Baltimore County (far left); Meadowridge 95 in Elkridge, Howard County (second and third from left); and Calverton in Prince George’s County (far right).

Merritt Properties’ green buildings dot the state: Schilling Green II in Hunt Valley, Baltimore County (far left); Meadowridge 95 in Elkridge, Howard County (second and third from left); and Calverton in Prince George’s County (far right).

“The companies who want to be leaders in their industry understand the benefits of sustainable building: a better work environment, better air quality, utility savings, worker productivity and, of course, what it does for the environment. By extension we are feeding into that philosophy,” Boeri says. And Boeri points out, because Merritt has always strived to be a leader in its own industry, it made perfect sense for the company to become a leader in sustainable building. “At Merritt, we believe in our employees and people and this commitment reflects that philosophy,” he explains.

Getting Started
From the onset, Merritt approached green building from an analytical perspective. Early on the company made a decision to support the U.S. Green Building Council’s (USGBC) emerging LEED Rating System, which continues to set the industry standard today. After completing an analysis of how much more it would cost to build to meet LEED standards, they were surprised to find costs weren’t much higher – at least not for them. According to Josh Asbury, a project manager and one of the company’s nine LEED Accredited Professionals, “Because of the quality of construction we’ve always used, the premium to convert is less than for other companies. At first, we thought it might add an extra 10 to 15 percent to build to LEED Silver standards. As we became more knowledgeable, we realized it was more like 7 to 8 percent for us. And as we refined the process, it’s even less.”

What Makes a Building Green?
• Increased ventilation
• Increased insulation
• More efficient mechanical systems
• Photovoltaic solar systems
• Solar hot water
• Green roofs
• Landscaping
• Daylighting
• Occupancy sensors
• LED lighting
• Hybrid car charging stations

It didn’t take long for Merritt to make the commitment to become not just a participant, but also a leader in sustainable design, building and operations. Today the company not only has the most LEED certified properties but also routinely seeks a higher level of certification than its competitors. Boeri says, “A lot of people are building to LEED Silver, but we’ve gone further. Schilling Green II is certified platinum, which takes a much bigger commitment.”

Not Just New Buildings
While new properties like Schilling Green II in Hunt Valley and Aberdeen Corporate Park are getting lots of attention for their green features, Merritt is as equally committed to greening existing buildings, interiors and its own operating practices as it is to new construction and development.

A number of Merritt properties have been converted to achieve LEED – Existing Building (EB) certification, the only option available for an existing structure, and they have established a hierarchy of how they will prioritize updates to their portfolio as buildings age. But Asbury points out, “Again, because we have always had higher standards than required, we have 20-year-old buildings with aging mechanical systems that are just as efficient as newer buildings, which gives us a big leg up for LEED EB.”

And LEED isn’t just limited to exteriors. With the help of Merritt’s team of experts, Schilling Green II tenant EA Engineering recently received LEED Gold for their own interior space. “We encourage companies to pursue LEED CI (Commercial Interior) for their spaces because of all the prerequisite points they already get from being in a LEED certified building. There’s not as much of a premium for them,” says Boeri, who estimates that as many as half of their tenants have LEED certification for their interiors.

Finally, Merritt walks the green walk in terms of its own operations. “We’ve taken a lot of what we’ve learned from green building and exported into our day-to-day business because it makes sense,” says Boeri. The company requires their janitorial services provider to use low VOC (volatile organic compound) cleaners, utilizes only low VOC paints and adhesives, and has clear recycling standards in place. Additionally, steps are in place during new construction, renovation or tenant interior work to protect the workers and the environment, including construction waste management and sealing duct work until it is ready to be used to improve air quality.

Good for the (Triple) Bottom Line
While the people and planet benefits of green building are self-evident, there are profit incentives, too. In some cases, Merritt receives direct incentives from BGE, such as a $140,000 rebate check for Centric Building Systems in Owings Mills. And while it’s hard to quantify whether they are really getting a premium in rent because new buildings typically command a higher rate anyway, Boeri says the lease percentage of Schilling Green II proves the investment in sustainable building was worthwhile. He says, “Schilling Green II is 96 percent leased by good companies who want to be leaders in their industry, to be good employers.”

Even in more crowded markets, such as the area surrounding Aberdeen Proving Ground in Harford County, green features can help set a building apart. For instance, Merritt’s Aberdeen Corporate Park is the only one of several new buildings that offers underfloor air distribution that delivers improved air quality while allowing for individual temperature control and underfloor conduit communication.

Finally, Boeri points out that while there is a lot of inventory of LEED Silver certified properties, for companies looking for higher levels of certification or looking for existing buildings that are LEED certified, Merritt has a clear advantage. Some companies and government offices are required to be housed in LEED certified buildings, which is why Merritt makes it easy for prospective tenants to search their website and property listings specifically for LEED buildings.

The Future Looks Green
So what does the future hold for green buildings? Asbury says elements like air-conditioning technology and LED lighting have really taken off. “One we’ve grabbed hold of to incorporate in existing buildings is smart metering technology. With Internet and new metering software, we can see on a minute-by-minute basis what each building is consuming, which helps us troubleshoot issues and control and improve energy use versus before when we just reviewed on a monthly basis.”

And while no one knows exactly what’s in store for future trends, one thing that’s certain to change is the LEED standards themselves. As builders become savvier in figuring out how to meet bare minimum requirements, USGBC keeps raising the bar, so buildings that were certified gold under an earlier version may only get silver today. Asbury calls the upcoming Version 4, expected to be released later this year, a “game changer.”

As for Merritt’s plans for the future, Boeri says, “We are always looking at ways to build our brand. We’re constantly evaluating what we’re doing and the product we have. For example, on the east side of town our product is probably 25 years old, and we don’t necessarily have a newer product to compete with other newer offerings, so we are looking for land opportunities to compete.” Additionally, Boeri says the company has accumulated so much expertise in building that it recently launched Merritt Construction Services, a sub-business that provides construction services to third-party customers. But one thing that is certain to remain the same is the company’s commitment to leading the way in sustainable design, as what started off as a way to gain a marketing advantage ultimately became a core company value. I95