Attendees at the Office & Industrial Market Update and 2013 Forecast Summit presented by The Colorado Real Estate Journal and Otten, Johnson, Robinson, Neff & Ragonetti on September 6 heard from a panel of general contractors who reported that developers of industrial properties frequently choose to meet LEED standards without seeking the official LEED certification, because the certification process adds $50,000 to $100,000 to the cost of the building.

Along those same lines, a September 5 Wall Street Journal article focused on a new apartment building to be built in Manhattan by a developer who was one of the first to build a LEED-certified skyscraper a decade ago. For its new building, the developer, the Durst Organization, plans to incorporate “green” features, but will not seek LEED certification. The developer says it wants the chance to be more innovative and not be bound by LEED’s checklist of features.

LEED has been criticized by others for being too lax in its standards, and for certifying buildings before they are actually in operation.

Meanwhile, the U.S. Green Building Council, which oversees LEED standards and certification, has said it is working on updated standards (LEED v4). Members of the Council are currently scheduled to vote on the updated standards in June 2013. According to the Council, “LEED v4 focuses on increasing technical stringency from past versions and developing new requirements for project types such as data centers, warehouse & distribution centers, hotels/motels, existing schools, existing retail, and mid-rise residential.”

It remains to be seen whether changes to the LEED standards will bring developers back into the LEED fold.

Photo of Victoria L. Hellmer Victoria L. Hellmer

Vicki Hellmer’s practice is focused on commercial real estate financing, including construction and permanent loans and workouts. She represents both lenders and borrowers, on loans involving all types of real estate—multifamily housing, mixed-use, hotel, office (including medical office), residential condominiums, and major retail projects.  She has also represented clients in the acquisition and disposition of properties, and the structuring of real estate joint ventures.