Retrofits of existing structures represent a strong market opportunity for green builders, according to McGraw-Hill Construction‘s latest SmartMarket Report, "Green Building Retrofit & Renovation: Rapidly Expanding Market Opportunities Through Existing Buildings." Currently, green building comprises 5 to 9 percent of the retrofit and renovation market activity by value, equating to a $2 billion to $4 billion marketplace for major projects. By 2014, that share is projected to grow to 20 to 30 percent, representing a $10 billion to $15 billion market for major retrofit projects.
"Ninety-eight percent of our buildings already exist, and they represent some of our most inefficient buildings," says Harvey Bernstein, vice president of global thought leadership and business development, McGraw-Hill Construction. "This market opportunity…will significantly contribute to the expansion of green products and services, which will have a long-term impact on our future economy and ability to build green."
The report, which profiles more than 20 projects to provide qualitative insights research data, includes the following highlights:
• Market opinion and indicators suggest much higher levels of activity long-term for retrofits and renovations overall as well as for the green share, which is expected to reach a tipping point in 10 to 15 years. At this time, half of all retrofits and renovations will be green.
• Owners and tenants with green retrofit experience are likely to do more green retrofit projects. More than two-thirds of owners who have engaged in green retrofit or renovation activities are planning to continue to do so for over 15 percent of future projects; 24 percent will do so on over 60 percent of projects. Tenants fall into two extremes: one-third are committed to green retrofits for over 60 percent of projects, while 17 percent are not yet committed.
• The downturn is encouraging the adoption of energy- and water-efficient practices in renovation projects. Sixty-two percent of owners expect the savings achieved from energy efficiency improvements to recoup their investments within 10 years. The most frequently applied features include energy-efficient lighting or natural lighting. Ninety-two percent also report installing more energy-efficient mechanical and electrical systems.