Industrial Midwest

Green Buildings bring focus to sustainability, more tenants requesting LEED Certification

Zurich North America's new headquarters in Schaumburg, Illinois, will be led by Clayco, as developer and design-builder. The 750,000-square-foot complex is expected to open in fall 2016 and strives to achieve high-level LEED certification. (Photo courtesy of Clayco)

It may not be spring all year-round in Chicago, but the city’s real estate market has certainly seen a generous amount of “green” in the past year.

It may not be spring all year-round in Chicago, but the city’s real estate market has certainly seen a generous amount of “green” in the past year.

Green Buildings continue to rise throughout the city, and the prospective tenants of these properties are the ones commonly requesting them.

Because of its environmentally-friendly approach in design and carefully selected resources, green building provides a boost to the economy while also resulting in buildings that are more attractive to tenants.

Whether a company considers green or sustainable initiatives comes down to core values, said John Gledhill, senior vice president at Transwestern.

Transwestern has two services for its sustainability goals—Transwestern’s Sustainability Services (TSS) is located in Milwaukee and its Sustainability Transaction Services is based in the Chicago region for occupiers, owners, and property managers.

Gledhill said when a company or people look at sustainable industrial properties, it’s because of four categories for decision making.


An environmentally-conscious company generally makes a decision on sustainability expenditures that it will do a level of green initiatives across the entire enterprise. Gledhill said it’s often with less regard to the recognition it may receive or the Return of Investment (ROI) of the upfront capital of those efforts, and more about its corporate ethos and doing what they believe to be the right thing.

Next on the list of motivations to address sustainability, are corporate image and brand enhancement, which he said incorporates a hiring and retention for millennials. Employees often make decisions incorporating a company’s stance on sustainability—healthier work places, quality of life, social consciousness are all taken into account, incorporating the total enterprises’ total stance on stewardship. He said that includes everything from the utilization of its workforce space, its industrial distribution and production impact and often its entire supply chain.

Profitability, ROI and savings in all of the company’s occupancy costs, he said, are the third major reason why both private and public companies turn to green or sustainable initiatives.

The fourth category is when it’s required. He said this includes certain standards that need to be met.

“A good example of that was started at Walmart with their sustainability guidelines,” Gledhill said. “In short, you need to meet certain guidelines. Companies are starting to require their downstream partners to participate in similar levels of sustainability.”

He added that capital impact and cost reduction also fall under the top four categories. This is where access to capital and partnership with investors—either private venture capitalists or public funding may require sustainable efforts to meet thresholds. Some examples include green funds, indexed sustainability investments and large, green indices where certain quantifiable green objectives must be met.

“An example is Dow Jones Sustainability Index (DJSI), where in order to get access to certain capital pools, you have to meet requirements for that index,” he said.

Trade groups or government entities are also required. Those involved with purchasing, contracting or permitting.

“A perfect example of that is the Government Services (GSA), which has strict policies that must be met in order for a contract position, proposal submission, space they occupy—whether industrial or office,” Gledhill said.

The companies in the last tranche are those with little to no interest in green initiatives but focus rather on profitability or market share dominance. Gledhill said these are the firms that are reducing in numbers quicker as metrics and identifiable savings from sustainable efforts are more prevalent. And what most companies are coming to realize, he said, is the tremendous impact to the bottom line sustainable investments can have for any size enterprise.

And while there are varying levels of interest in public and private companies in regards to sustainability, Gledhill said the key for advisors is to listen to the client’s strategic goals and then to tactically help them through the decision and execution process.

“Sometimes our clients benchmark against their previous performances and other times, they benchmark or compare against an industry standard or competitive subset,” Gledhill said. “As we dial up with our clients, we see more are interested in starting or increasing sustainable initiatives.”


Opus Design Build, L.L.C., recently completed a 335,000-square-foot, ready-cut food processing facility for Fresh Express in Streamwood, Illinois, that earned LEED Silver certification.

Jim Caesar, regional vice president at Opus Design Build, L.L.C., said the project earned its certificate by its water use reduction and optimized energy performance, in addition to the re-use of existing building materials.

The existing structures were constantly used to accommodate the goals of the clients and included tearing down and rebuilding a portion of the structure, renovating part of the existing structure and partial new construction of building additions.

Caesar said they felt fortunate to be a part of the building project with Fresh Express and that they are a very forward thinking organization. With their complex needs in this ready-cut food processing facility, he said there were tremendous opportunities on the sustainability front.

“Their new building team staff really enhanced our delivery process with their technical knowledge, sustainability goals and their general participation in the design and construction process,” Caesar said.


But in order for a project to qualify as sustainable or LEED certified, it has to go through a rigorous process, starting from early conception through design, construction and operation.

These need to meet the minimum requirements of the LEED Certification Process in five areas— Sustainable site development, water efficiency, energy and atmosphere, materials and resources and indoor environmental quality.

Caesar believes Green Building is a great thing for the future of industrial real estate. He said many of the organizations that have developed certification levels and processes to document sustainable building efforts, have helped create an enhanced awareness in the building industry about the opportunities and benefits of sustainable design.

“Most of our industrial clients now come to us with a basic understanding of sustainable design and construction, and ask for further education,” Caesar said. “We see this as a very positive trend.”

He also notes that the new version of LEED—LEED V4— has specific guidelines for warehouses and data centers, that he said, will greatly improve the process for these types of facilities to follow a sustainable design and construction process that leads to the certificate.

“Because these types of facilities tend to be large energy users, 24/7 operations with large operating costs, we see them benefitting greatly from and being strong proponents of Green Building,” Caesar said.

And as for the investments? Caesar said building owners and tenants are seeing immediate paybacks in terms of employee and occupant welfare, as well as through energy efficiencies, which result in reductions in operating costs.

He said most of their clients are moving from buildings that were built prior to this “sustainability wave” and the differences in perspectives are striking between the old and the new.