Corporate Expansion & Relocation

Recycled buildings bring fresh approach to relocations

They're the environmentally conscious option

Buildings go from obsolete to state-of-the-art

By Keith Ross

Reduce, reuse, recycle...why not apply it to commercial real estate as well as to aluminum, glass, plastic, paper, etc.? Perhaps one of the slower industries to think "green," the commercial real estate industry has, in the past decade, become more cognizant of and involved in environmental issues. A primary focus of this surge of interest in environmental issues has concentrated on "brownfields" and their transformation into viable properties. However, increasing focus is being placed on another positive environmental contribution that the real estate industry can make, and is spurring progressive developers and owners to action. This new area of focus is "recycling buildings."

From obsolete to state-of-the-art

Historically, many developers have concentrated almost exclusively on the development of raw land, rather than systematically reviewing other land use options, such as redevelopment. The emergence of "recycling buildings" reflects a basic paradigm shift, representing the latest thinking in redeveloping existing commercial properties, particularly old or obsolete facilities or those in dire need of a makeover.

Traditionally, developers and growing companies had two choices when it came to dealing with an existing project, particularly with industrial facilities: they could either bring the facility up to code, implementing modern technology via the "band-aid" approach, which can be very expensive and sometimes physically impossible; or, they could demolish the existing structure(s) to make room for the new facility, disposing of the old building materials at local landfill sites and purchasing new materials for the new structure.

Recycling buildings provides a third option. In terms of real estate and buildings, "recycling" takes the traditional demolition and rebuilding process to the next level, where everything is approached from a reuse standpoint. The majority of demo materials are used on-site, with the rest being shipped to industrial recycling facilities and then sold or donated for use in real estate and other projects. What was once a functionally obsolete building is not only demolished but literally reused in the creation of technologically advanced, energy efficient, state-of-the-art facilities.

It is just such a project that our company, Koll Real Estate Group, recently commenced at an existing site in the city of Anaheim. Two unused, 1960s-era buildings are being recycled in preparation for development of a new 315,000-square-foot speculative industrial facility, Koll's Anaheim Technology Center.

From a process standpoint, building recycling begins very much like traditional demolition projects, with the take down of the interior structures, including tenant improvements. Wood studs from the walls and other timber materials are extracted and glass is removed, as is all aluminum and mechanical equipment. The building's concrete structure, structural steel and roof are then knocked down using tractors and loaders.

At this juncture, the "traditional" and "recycling" methods diverge -- while the debris materials from the usual demolition process are loaded into trucks headed for a landfill, activity at the building recycling project looks altogether different.

Demolished concrete is transported to another area of the demolition site for crushing and reuse as an aggregate compound in laying the foundation for the new slab and asphalt paving base. Structural steel and aluminum are transported to an industrial recycling facility to be melted down and reused in various products. So is the glass. All two-by-fours and wood products are collected and recycled via sale or donation. The building's mechanical equipment, including electrical switch gear panels, air handlers, pumps, water risers, cabling and copper wiring, is harvested and made available for older facilities which require vintage parts. Even asphalt from parking and other areas is broken, ground up and reused along with the concrete aggregate.

Only the drywall and roofing, which comprise a very small percentage of the total structural materials, are not suitable for reuse.

So, what does all this building recycling mean in environmental terms? Beyond the obvious notion that "recycling is good," recycling buildings allows the commercial real estate industry to make a measurable difference in the health of our planet.

Environmental preservation

Environmentally, the problem of deforestation is one of the hottest issues of the 1990s and is likely to continue to be so well into the 21st century. According to the Rainforest Action Network of San Francisco, California, the global rate of rain forest deforestation is 2.4 acres per second -- roughly equivalent to two U.S. football fields -- or 149 acres per minute. In addition to destruction of the actual timber itself, deforestation is directly responsible for the extinction of approximately 137 species of plants and animals per day. If deforestation continues at current rates, scientists estimate nearly all tropical rain forest ecosystems will be destroyed by the year 2030.

Building recycling helps slow down deforestation. Though its impact may seem small in proportion to worldwide consumption, the wood products recycled and reused via this process represent a positive step in maintaining viable forest resources. And this impact will only increase as more developers, owners and businesses recognize the benefits of building recycling and expand the scope of its use.

Another major area of concern in the environmental arena is landfill volume. While the increasing emphasis on recycling over the past 15 to 20 years has positively affected landfill volume, statistics provided by the National Solid Waste Management Association (NSWMA) show that the issue is far from resolved. According to NSWMA, at year end 1995, the capacity of California's 315 existing landfills would only accommodate the state's projected solid waste products for an estimated 10 years before additional landfill sites become necessary.

By making use of discarded building materials that would otherwise contribute to the larger landfill problem, building recycling can and does make a difference in landfill volume.

Steel and aluminum manufacturing, too, are an ongoing source of environmental concern. The production of these metals requires naturally-occurring ores (and coal, for steel), obtained through both strip and shaft mining. By-products from their production also add contaminants to our air and water. Data published by the Institute of Scrap Recycling Industries, Inc., indicates that reusing steel and aluminum collected through efforts such as building recycling eliminates the need for 90 percent of "virgin" materials used in the production process, such as iron and bauxite ore. Consequently, recycling reduces mining waste by 97 percent, air pollution by 86 percent and water pollution by 76 percent.

Energy conservation is another area where building recycling, in its broadest sense, can really make a difference by transforming old "energy-guzzling" structures into new energy-efficient facilities. Over the last decade, great strides have been made in creating and implementing more energy-efficient building systems, such as special lighting fixtures and Thermal Energy Storage (TES), an alternative cooling system using ice and/or special salts to reduce peak time energy consumption, and fiber optic cabling. By taking these older buildings off the market and making room for "smart buildings," building recycling serves to boost energy conservation efforts.

In terms of a real-life example, consider Koll's Anaheim Tech Center currently under development. By choosing to recycle the existing facilities, Koll Real Estate Group has rerouted more than 200,000 square feet of concrete and other remains from their usual landfill destination to earth-smart reuse on-site. This debris concrete will net more than 20,000 cubic yards of aggregate to be used in the foundation slab and site asphalt base of the planned speculative industrial building. Additionally, all demolished asphalt and parking lot materials will be churned into a dirt-like compound and used in the new paving.

Hundreds of 2" by 4" wood studs from the demolished buildings are being sent to Mexico for reuse, preventing the further destruction of the world's forests. All of the glass from the project will be melted down and reused. Several tons of steel support beams and aluminum parts and materials will be sent to the Steel Belt to be melted down and reused as well.

In all, ninety percent of the demolished structural materials will be recycled and reused for the new energy-efficient industrial facility and other real estate projects.

Clearly, on the basis of environmental impact, recycling buildings makes sense. However, for developers and expanding or relocating companies, it also brings up understandable concerns about economics and bottom line impact. Although the concept of building recycling may conjure up images of complication and financial burden -- "earth friendly" at the expense of maintaining a viable business -- in fact, the opposite is true. Going the recycling route actually simplifies the development process and, in addition to environmental benefits, offers tremendous economic and community advantages -- a definite win-win situation.

Economic advantages

Financially, recycling a building costs no more than traditional take down and rebuild projects. In fact, building recycling can ultimately save money for developers. How is this accomplished? Consider the following:

On-site reuse of much of the debris from the old building greatly reduces the amount of materials to be transported off site, which in turn significantly reduces transportation costs.

Reusing and recycling the demolished building materials not only cuts down landfill volume, it eliminates associated landfill dumping fees.

The building recycling process also cuts costs by significantly decreasing the amount of additional raw materials required for new construction, thus reducing both purchase and delivery fees.

In commercial real estate, as with most businesses, time is money. Aided by crushing equipment and other machinery, reusing materials on-site allows development activity to continue without interruption, reducing downtime engendered by waiting to receive purchased materials.

By facilitating a continuous flow of activity, building recycling can actually shorten the amount of time needed to complete the project (as compared to traditional razing and rebuilding), allowing the project to be delivered on or ahead of schedule, signed tenants to move in sooner, and man power to be redirected to other development projects.

Building recycling can create actual income for the developer from the sale of recycled materials, including steel, aluminum, wood, glass, mechanical and electrical equipment, helping to offset a portion of the demolition and development costs.

In all of these ways and more, building recycling provides economic advantages that complement its environmental benefits and magnify its overall value as a viable development alternative. As an illustration, building recycling at Koll's Anaheim Technology Center project will likely save Koll Real Estate Group more than $100,000.

Beyond cost savings, recycling buildings can directly contribute to the revitalization and economic development of surrounding communities, as well as those areas in need of a helping hand.

Community renewal

From a broad-based community perspective, the very act of taking down old or dilapidated buildings and replacing them with state-of-the-art facilities can trigger a chain reaction that leads to increased economic growth and positive change, particularly in this era of renewed interest in urban redevelopment.

The availability of a new, technologically advanced facility in an otherwise "stagnant" area -- whether urban or suburban -- provides an opportunity to attract high quality companies. The commitment of one or more of these companies to come into the community often serves as a magnet in attracting additional new businesses, spurring further redevelopment activity and, ultimately, economic growth. Historically, sustained business growth often attracts new residents to the area, creating an opportunity for physical growth and further redefining the economic dynamic of the community.

Recycling buildings not only aids in re-energizing communities and stimulating economic development, but can contribute to improved of quality of life in impoverished or otherwise needy communities. With its many reusable by-products, building recycling offers an ideal springboard from which to assist those communities without the resources to help themselves. Koll, for instance, is donating wood that will be sent from its Anaheim project to Mexico for use in building homes. By donating a portion of recycled or recyclable materials -- including timber, glass and mechanical and electrical equipment, etc. -- to charitable organizations for sale or distribution, commercial real estate developers move into the realm of socially responsible corporate citizenship, contributing to the greater good of society as a whole.

In short, with building recycling, everybody wins -- our environment, development companies, communities, even expanding and relocating companies, who can take pride in the fact that they are party to the preservation of our natural resources.

Keith Ross is senior vice president of development for Koll Real Estate Group (KREG), a leading provider of diversified real estate services in the United States, Mexico and Asia. KREG is a member of the Koll Network of Companies and encompasses some 35 projects valued in excess of $1.2 billion and accounting for more than 12 million square feet of office, R & D;, and retail centers; business and industrial parks; and residential communities. Further informaiton is available from Ross at 714-833-3030 or by e-mail at rossk@koll.com.

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