This year saw a major shift in the green building sector. According to figures released earlier this month, the majority of green buildings around the world using the Leadership in Energy and Environmental Design (LEED) criteria are retrofits of existing buildings rather than new builds.
This is a positive shift. While green construction of new buildings is important, it only adds to existing building stock — potentially overshadowing the investment opportunities in existing commercial buildings. Some of the easiest emissions reduction opportunities are in the 60 billion square feet of commercial buildings already built around the U.S. alone.
The U.S. Green Building Council (USGBC) says the increase in retrofits started picking up in 2008 and have now surpassed new builds into 2011 by about 15 million square feet.
Since 2008, the downturn in new construction has shifted activity away from new buildings. While the green building sector has fared better than its conventional counterpart — growing 50% from 2008-2010 and representing 25% of all construction activity last year — the new build sector has mirrored the broader slowdown.
Also adding to the shift, some very large buildings have gotten make overs under the LEED system. From the Empire State Building to Tapiei 101, the largest building in the world, building owners have invested tens of millions of dollars into efficiency upgrades. (According to the USGBC, The Empire State Building project will save $4.4 million in energy costs and provide a return on investment in three years.)
According to a report from McGraw Hill Construction, green retrofits will grow to a third of the overall commercial retrofit market in the next three years — representing up to $18 billion in economic activity.