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   ARTICLE   |   From Scotsman Guide Commercial Edition   |   April 2014

Team Up for a Green Future

Partnering with construction companies pays dividends

Team Up for a Green Future

With each passing year, more and more environmentally conscious activities become incorporated as best practices in everyday life. The reasons for this vary: Some people and companies are committed to reducing their environmental impact, some recognize trends headed in that direction and choose to get ahead of the curve, and others simply realize that many green practices are less expensive than the old alternatives.

Even companies that have resisted the green movement now have to comply with the building and energy codes and standards required in today’s market. Regardless of the reason why a property or new project is incorporating green features, commercial mortgage originators should recognize and understand the market for these types of buildings because they attract a large and diverse group of interested buyers with varying wants and needs.

To do this effectively, mortgage professionals should look for specific characteristics and affiliations of the property or project’s construction company. Specifically, they should seek to partner with construction companies that have a proven commitment to practicing sustainable building. These construction companies can demonstrate this commitment through their work on projects certified by Leadership in Energy and Environmental Design (LEED) and by their membership in the U.S. Green Building Council (USGBC).


According to the USGBC, LEED is the most widely recognized and used green-building program in the world. A certification program that reviews buildings, homes and communities, LEED advocates for and incorporates efficient attributes in the design, construction, operation and maintenance of every project it approves. Furthermore, having LEED credentials helps a company demonstrate aptitude in sustainable building design, construction, operations and maintenance.

It’s quite possible — and, in fact, probable — that mortgage originators will find that they are working less often with actual LEED certified projects than with green-inspired projects. It can be argued that the LEED movement has served its purpose in quickly educating a large group within the building industry in both design and construction practices.

Beyond LEED

In fact, even without LEED credentialing, many builders and construction companies have adopted LEED-inspired green features into their designs. This makes sense because an increasing number of green products are available.

For example, environmental awareness around the world is resulting in a phase-out of incandescent light bulbs in favor of more efficient alternatives. Utility companies often offer credits for the retrofitting or installation of more efficient systems, from heating, ventilation and air conditioning (HVAC) to lighting. These changes not only make it easy for companies to jump on the green bandwagon, but also make it almost impossible to resist.

Mortgage professionals should seek out companies that, in addition to incorporating green features, can provide preconstruction services, which can prove integral to a client’s success in meeting green-building objectives. A company of this type will actively participate in assisting the client’s LEED consultants and commissioning agent, architect, and mechanical engineering and plumbing professionals in determining feasibility for individual LEED point criteria. These companies may also assist in providing the documentation that’s crucial to completing the LEED certification process with the USGBC, if that certification is desired.


When evaluating construction companies, it is also helpful to determine if they promote green improvements for themselves, their clients and their communities through education and active participation in sustainability initiatives and organizations. Assessing the company’s corporate responsibility can reflect its sensitivity to sustainable building.

An originator should ask whether the company has provided preconstruction and/or construction-management services on LEED or other green projects in the past. A collaborative construction company can be a valuable partner and resource, as this entity will work directly with the client, design professionals, consultants, subcontractors, lending agents and other project team members to ensure that all criteria are met when designing and building a sustainable facility.

When reviewing architectural and construction companies that will be working on a project involving new construction, a mortgage professional should determine how many of a given company’s staff members — especially project managers — have LEED professional credentials. These credentials indicate key technical knowledge and credibility based on experience and study, and they also imply successful completion of exams administered by the Green Building Certification Institute.

In addition, construction companies can demonstrate their commitment to environmental improvement through involvement in local and national organizations whose interests are focused on pursuing energy reduction, minimizing impacts on natural resources, enhancing conservation practices and promoting ecological balance. Research the company’s previous projects and ask about the sustainable opportunities recognized and incorporated within those projects. This will help you determine how the company has implemented successful solutions to previous environmental challenges.

Building costs

Misunderstanding green-building costs can sometimes lead to arguments against incorporating eco-conscious measures in a project. The truth is that the added costs of selecting energy-efficient building materials should not scare off lenders.

Although the initial cost to build or purchase such a property can be higher — although that is not a given — technological advances have made environmentally sound building materials much more affordable than in years past. In addition, most energy-efficient practices now have proven track records of paying for themselves over a matter of a few years or even months. The short-term higher price tag of a project quickly turns into a long-term saving solution.

In fact, these types of modifications may increase a building’s resale value. The demand for buildings that incorporate environmentally friendly construction practices is increasing, and a property that already has these green characteristics may prove easier and more lucrative to sell than one that needs to be retrofitted with such materials.

Green features

There are many ways a building can incorporate green-themed initiatives. Builders can use green-inspired, sustainable PVC trim, cork and vinyl flooring, and cement siding instead of more traditional materials. Energy efficiency also can be incorporated into a building’s design through improved and increased insulation and higher R-values, light-emitting diode lighting, continuous insulation from footing to roof, and installation of efficient air handling units and ductwork within the building envelope.

Finally, it should not be assumed that the type of construction will limit whether eco-conscious measures can be put into place. With so many variations, green initiatives have proven successful in a range of projects, from art museums to schools to individual residences. Renovations to previously built structures may also be updated to include environmentally friendly attributes and may offer an opportunity to retrofit more sustainable features to certain older sections of a structure not originally included in the renovation.

• • •

It makes sense for commercial mortgage originators to look for projects that have paid attention to sustainable efforts, as well as to partner with construction companies that have the capacity and desire to build with green concerns in mind. Given the already-demonstrated financial and environmental success of the green movement, it makes little sense to resist. 


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