High CAPEX costs often make it difficult for building owners to justify investment in high-performance buildings (HBP). Now a new study has revealed that owners can achieve an annual gain of $ 3,395 per year through investments in high performance buildings.
The study which compiled financial impact calculations from more than 60 research studies with a focus on workplace productivity, employee retention, and wellness, found that HPBs gain $18.56 per square foot annually.
While utility and maintenance cost savings were among the most frequently cited benefits, they offered the least financial value. Forty-three percent of the total value of HPBs came from enhanced employee productivity, 41% from increased employee retention, 7% from improved employee wellness, 7% from utility savings, and 2% from maintenance savings.
What makes a high performance building?
According to the National Institute of Building Sciences High Performance Building Council, an HPB is a structure which addresses the human, environmental, economic, and total societal impact through the application of the highest level of design, construction, operation, and maintenance principles.
While there are no direct requirements for HPBs, their value is often communicated through rating systems such as LEED, the WELL Building Standard, the Living Building Challenge, BREEAM, CASBEE, and others.
Key elements which are used to define high performance buildings
1. Enhanced occupant experience: High performance buildings embed human health, wellness, and comfort in the design, construction, and operations of a building or space within a building.
2. Optimized resource efficiency: HPBs provide greater value with less input by using the Earth’s finite resources without risking the future generation’s ability to utilize those same resources.
3. Minimal environmental impact: HPBs use strategies that significantly reduce or eliminate negative impacts on the natural environment without jeopardizing the intention or function of the building.
4. Embedded resiliency: HPBs are embedded with the capacity to adapt to changing conditions and to maintain or regain functionality and vitality in the face of stress or disturbance.
5. Improved financial performance: HPBs deliver a higher financial return than traditional buildings of the same use type due to the thoughtful integration of sustainable design principles.
Making smarter commercial real estate decisions
While the upfront costs of HPBs are greater than traditional building, over the long -term low-cost construction options stifle employee performance and risk obsolescence.
Annualized costs for construction are between 1% to 4 % however a company will spend 80% to 92% on people in the form of wages and benefits and 6% to 15% on operations and maintenance.
The report found that rather than focusing on the lowest costs possible building owners and tenants should shift their perspective to the long-term opportunities of HPBs.
With the majority of long-term costs and significantly higher spend on employees and occupants, HPBs bring a larger return over the life of the investment.