CoStar Study Finds Higher Demand, Rent Prices for Green Buildings
A comparison of similar green (LEED certified or Energy Star labeled) and non-green buildings finds that the greener options are in higher demand, have higher occupancy rates, charge more for rent and sell at higher prices. Read More
Green
buildings that have earned LEED certification or the Energy Star label
have higher occupancy rates as well as higher rents and sale prices
than non-green facilities, according to a study by CoStar Group.
LEED-certified buildings have a 3.8 percent higher occupancy rate
and Energy Star buildings have a 3.6 percent higher occupancy rate that
non-LEED and non-Energy Star buildings, respectively, according to the
study.
The study also found LEED buildings have rent premiums of $11.24
per square foot and sell for an average of $171 per square foot more
than non-LEED locations. Energy Star buildings also command higher
rates, although less than LEED buildings. Energy Star buildings were
found to have a $2.38 per square foot premium over comparable
non-Energy Star buildings and sell for an average of $61 per square
foot more than the other buildings.
The study was conducted by Jay Spivey, CoStar’s director of
analytics, and Dr. Norm Miller of the Burnham-Moores Center for Real
Estate at the University of San Diego. They looked at more than 1,300
LEED and Energy Star buildings that represent about 351 million square
feet of the 44 billion square feet of commercial property in CoStar’s
database. The study compared the green buildings with non-green peers
based on size, location, class, tenancy and year-built characteristics.
Part of the reason green buildings command higher rates and sale
prices is their scarcity. Although the number of LEED and Energy Star
buildings is growing, it is not in line with demand, which is much
higher, the study found. The energy efficiency of green buildings is
also a factor in increasing property value, according to the study.
