This building proves it’s possible to build deeply sustainably…and profitably
We explore the financial viability of the “world’s greenest commercial building”, the Bullitt Center — one of the very first recipients of the Living Building Challenge.
A building that has stringent requirements on energy, water, and the use of non-toxic materials sounds…expensive.
But for the Living Building Challenge to exist in our current economic system, it must be financially viable. And it is. During the 2021 Living Future Europe Masterclass, one of our trainers, Diana Ilina, founder of Lune Realty and former finance manager, looked at one of LBC’s most famous case studies, the Bullitt Center in Seattle, USA, to assess its financial viability.
The financial model and strategy probably can’t be directly applied to today (the Bullitt Center was completed 8 years ago). But this is a good thing. It’s now much easier to finance and insure these deeply sustainable buildings. We can still explore the long-term cost benefits broken down below as a guide, bearing in mind that living buildings constructed now will be even more efficient with the advances in technology.
The first office living building in the world
When philanthropic organization, the Bullitt Foundation set out to upgrade their headquarters in Seattle, USA, they stayed true to their conservation roots, creating a building that now acts as inspiration for what a living building can achieve.
The building is a model for urban ecology. CEO of the Bullitt Foundation, Denis Hayes sums this up:
“…instead of pursuing just net zero energy, net zero water, net zero carbon, composting toilets, toxic-free materials, an enticing stairway, 80+ percent day lighting using high-performance windows — we chose all-of-the-above. And we chose them for a six-story urban infill project in a dense neighborhood.”
We generate as much electricity as we use from solar panels on our roof, so society doesn’t have to build a new power plant. We capture rainwater for all purposes, including drinking, so society doesn’t need to build a new reservoir. We use composting toilets, so society doesn’t need to build new sewage treatment capacity. We return treated gray water to the soil on site, reducing the need for storm water drains.”
A financial case study that serves as inspiration, not direct application
The site for the Bullitt Center was purchased in 2008 and the project was completed in 2013. The landscape for acquiring funding during this period was vastly different to now. No special loans for green buildings existed and very few banks were interested in projects that had such a lofty sustainability scope.
The project required the creative bundling of loans and tax credits to go ahead. The age of this case study means that it probably isn’t directly applicable to today’s landscape. But we’re able to investigate its long-term financial viability.
Today, financial institutions future proof themselves by rewarding stringent sustainability
As we move further into the climate crisis, governments, banks, and insurers realise that they need to mitigate this risk. The lists below show how much easier it is to achieve the Living Building Challenge, compared to the Bullitt Center case:
As Diana points out, insurance companies are only going to become stricter about how they insure for buildings in the climate crisis. It benefits insurance providers and property developers alike to create buildings that are healthy for humans and truly ecologically restorative.
The numbers breakdown
Let’s take a closer look at the financials. This is all based on publicly available information. If you want to read more, here are some of the sources we used:
- The Greenest Building
- Living Proof: Seattle’s Net Zero Energy Bullitt Center by Robert B. Peña
- Urban Land Institute Case Studies – Bullitt Center
Development cost information of the Bullitt Center
Below are the costs of land, construction, design, and other soft costs in USD, amounting to $32,500,000. The site was bought in Seattle, USA, in 2008, planning started in 2009, construction in 2011, and it was completed in 2013.
The Bullitt Center has 6 floors and is cash-flow positive when it is fully leased. Diana based the leasing estimate below on information that is publicly available, including the tax returns of the Bullitt Center. It is converted into metric units but still in USD.
Energy savings of the Bullitt Center
The energy savings of the Bullitt Center are phenomenal. At 85% occupancy, the building achieved a 10 EUI (Energy use intensity is an indicator of the energy efficiency of a building’s design and operations).
To put this into context, average office buildings received an EUI of 92 in the same year and LEED Platinum achieved 34.
Designed to bring decades of economic returns
Diana estimates the building’s loan payback period at 25 years (based on the life span of the building’s equipment, such as solar panels). But the building itself is designed to last 250 years. This deeply ties into one of the core philosophies of both the Living Building Challenge and the Bullitt Foundation — that buildings are not expendable commodities, they are woven into the very fabric of our society and ecosystems.
This also makes for a good financial strategy:
- savings and incentives earned through net zero energy, water, and carbon
- more cost-effective to insure
- attractive to lease
There is also the flow-on effect of helping materials companies create new products and distribution channels that are better for their companies and allow them to innovate and more effectively produce these types of materials.
Ultimately, the Bullitt Center was created out of a need far greater than economic returns. These kinds of buildings are necessary to help create resilient, whole urban systems. These healthy, living systems evolve and respond to complexities. The Bullitt Center is a model for what it could look like if we built for good health for both people and planet.
Living Future Europe Masterclass
This financial case study was part of the Living Future Europe 2021 Masterclass, our first ever Masterclass. It was a great success with built environment practitioners joining us from all over Europe to learn, explore, and understand how to create a better built environment. We established a truly encouraging community who have gone on to support and collaborate with one another far beyond the Masterclass itself.
If you are interested in joining the second cohort, the Living Future Europe Masterclass 2022 (currently scheduled for the second half of 2022), please register your interest here and we will be in touch in the new year.