LEED Green Building has Economic Value, Too

Environmental and energy-based returns on green building may provide the basis for the practice’s existence and prevalence today, but there are additional benefits to be gained that are worthy of note. Economic returns are one such advantage that also bears attention, according to a recent report, published by the University of California, Berkeley.

Entitled Doing Well by Doing Good? Green Office Buildings, the report claims that it “provides the first credible evidence on the economic value of the certification of “green buildings” in the commercial sector – value derived from impersonal market transactions rather than engineering estimates.”

Analyzing 693 certified (under Energy Star and LEED) green buildings against 7,489 other office buildings located within a quarter of a mile from the certified buildings, the study found “systematic evidence that rents for green offices are about two percent higher than rents for comparable buildings located nearby. Effective rents, i.e., rents adjusted for the occupancy levels in office buildings, are about six percent higher in green buildings than in comparable office buildings nearby. At prevailing capitalization rates, conversion of the average non-green building to an equivalent green building would add more than $5 million in market value."

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PERSONALLY SPEAKING

It looks like corporate responsibility can have its perks, and compete with the bottom line. Green building encourages practices that are not only environmentally-friendly, efficient, sustainable, unique (and, in my opinion, interesting), but also provides a return on investment that can help sway the opinion of even the most ardent deniers of such beliefs and practices. Having your building certified to the standards recognized under such a rating system as LEED sets it apart from the rest – and this can only provide you with positive feedback, as we have seen more and more as green building becomes more prevalent. People are recognizing buildings for pursuing green rating systems, and this is showing through in the fact that tenants are willing to pay more rent for the privilege of occupying a building that improves levels of efficiency, ecological friendliness, energy cost savings, and employee satisfaction.~Matt

Matt Kiszka is the LEED and Greenbuilding Initiatives Project Manager for Renewable Choice