Report: Green Building Poised For Explosive Grow

Green building remains red hot despite a sluggish economy that has curtailed new development, New York-based McGraw-Hill Construction reported.

Green construction grew 50 percent during the last two years from $42 billion up to $71 billion, the report said. It will account for about 25 percent of all new building activity in 2010, the report added.

McGraw-Hill Construction projected market spending for green building will reach $135 billion by 2015. A third of all new nonresidential construction is green -- a $54 billion market. In five years, McGraw-Hill Construction projects, nonresidential green building activity will triple, reaching up to $145 billion in new construction for a 48 percent market share.

 Health care construction is expected to grow its green share up to 40 percent in 2010, representing up to $9 billion in spending, the company said. Education, meanwhile, is valued at between $13 billion to $16 billion, while green office construction is represents a $7 billion to $8 billion market.

Bigger projects are increasingly going green, with the U.S. Green Building Council's Leadership in Energy and Environment Design specification being mentioned in 71% of all developments valued at more than $50 million.

"It's an amazing area of opportunity at time when the construction market is extremely challenged," McGraw-Hill Vice President Harvey Bernstein said. "In today's economy, firms that specialize in green or serve this market are seeing a tremendous advantage -- and they're doing well at the same time. Green building leads to healthier places for us to live and work in, lower energy and water use, and better profitability."

McGraw-Hill Construction attributes green building's rapid expansion to owners' desire for market differentiation, growing public awareness and an increase in ecoconscious local and federal government regulations. Green building also reduces operating costs 13.6% on average in new buildings, while boosting building values 10.9% , the company said.

Going green can also boost return on investments by 9.9 percent for new buildings and 19.2% for retrofits, the company said. These pluses are attracting acolytes, including the city of Las Vegas, to green building.

The new eight-story, 308,990-sq-ft City Hall is being built green, for example. The still-under-construction project has solar panels on its roof and an outdoor plaza with freestanding photovoltaic trees that double as shade awnings. The new building, designed by JMA, is projected to reduce the city's energy costs by more than $500,000 annually.

Twelve federal agencies and 33 states had a green building mandate as of September, McGraw-Hill Construction reported. Local government green initiatives have gone from 156 localities in 2008 to 384 localities in 2010, the company added. The cities of Las Vegas and Henderson have sustainable building policies, as do the state of Nevada and Clark County.

"We don't have any clients that don't want a sustainable building. It has now become a common practice," JMA President Thomas Schoeman said. "The city wants to be a sustainable-oriented public agency. I think it's important to them because public buildings make a statement about where you live."