The report, Do Green Buildings Make Dollars & Sense?, represents the findings of the second phase of a multi-year study initiated last year by CB Richard Ellis Group, Inc. (CBRE), the Fortune 500 commercial real estate services firm, and the University of San Diego's Burnham-Moores Center for Real Estate.
McGraw-Hill Construction also participated as a study partner this year. All told, the researchers surveyed 154 buildings under CBRE management totalling 51.6 million square feet and 3,000 tenants in 10 U.S. markets.
What they found is that owners of “green” buildings throughout the US expect a four percent higher return on their property investments and a five percent larger appreciation in their buildings’ value then those who handle traditional properties.
“The results of this project are beginning to demonstrate the very real and positive impact of sustainable buildings for both our owners and tenant occupants,” said David Pogue, CBRE’s national director of sustainability. “We have been seeking ways to make an empirical case for the economic benefits of sustainable practices and the results of this study exceeded our expectations.”
For the purpose of the study, a “green” building was defined as one with any level of Leadership in Energy and Environmental Design (LEED) certification or the US Energy Protection Agency’s Energy Star label.
Most of the buildings analysed also embraced other sustainable practices like recycling, adopting water conservation measures, and using environmentally friendly cleaning methods.
About 79 percent of the owners surveyed expect their property's green label to lure in enough tenants to bump up their building’s occupancy by five percent. The managers also anticipate a 1 percent increase in rental income.
The respondents also believe that green initiatives contribute to tenant retention.
Tenant respondents reported a 10 percent increase in productivity, higher employee satisfaction with green space and a conviction that green spaces provide a healthier working environment.
Back in 2009, the first year of the study, the researchers found that green buildings have 3.5 percent lower vacancy rates, 13 percent higher rental rates compared with other buildings, and 2.88 fewer sick days per year for tenants, translating to an annual savings of more than $5 per square foot.
Separately metered tenants in green building had 21 percent lower utility costs than their counterparts in “non-green” buildings in 2009. A single point improvement in Energy Star equates to a .83-1.0 improvement in energy usage (for example, an increase from 50 to 80 equals a 25 percent reduction in usage and costs).
The first year of the study also found that 18 percent of tenants are willing to pay more for green space, and that tenants believe healthy indoor environments positively impact staff retention (61 percent) and client image (70 percent).
For additional information:
CB Richard Ellis Group, Inc. Envirometrics
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