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| SPEC-TACULAR: Koll Development’s sustainable vision for the future of corporate real estate. image courtesy of Koll Development |
Dallas-based Koll Development Co. is risking green on green. It’s a gamble on a product they believe Corporate America—and particularly Corporate Dallas—is ready to embrace.
“Employees are demanding sustainable workplaces, and companies are lining up to make sure buildings they are going into, whenever possible, have green attributes,” says Steve Van Amburgh, CEO of KDC, which has developed close to $2 billion in real estate in the last decade. “We just wanted to take that to the next level.”
The product is called Intellicenter-Dallas, a high-performance purely speculative office building that won’t just be green—it will be LEED-certified in compliance with the strict criteria of the U.S. Green Building Council. The LEED rating system is designed to promote buildings that are environmentally responsible, profitable, and healthy. Buildings gain or lose points depending on their water usage, energy efficiency, indoor air quality, use of recycled materials, and other sustainability factors.
Intellicenter-Dallas is slated to come on line at the end of this year. KDC is building four others—in Houston, Atlanta, Charlotte, N.C., and Riverside, Calif. The 211,000-square-foot Intellicenter-Dallas is located on the southwest corner of Interstate 635 and Belt Line Road in Irving.
The number of LEED-certified buildings has increased recently, but almost all of them are built-to-suit products by companies that are willing to pay the higher upfront costs to either save on energy costs or to make a smaller environmental footprint on the world. Or both. Van Amburgh says his slate of Intellicenters were built 100 percent on spec—no pre-leasing. It’s a product that carries its own upfront premium in cost. But he doesn’t see that as a risk at all.
“To achieve LEED design, you figure it’s a premium of about $2-$3 more per square foot on the cost of construction, or about 25 cents per square foot on a lease rate,” Van Amburgh says. “That’s 1 or 2 percent premium and you’re going to get payback on that in energy costs alone. People scoffed at this a few years ago, but we’re going to come to a place where it’s the rule.”
