December 12, 2007—The Burnham-Moores Center for Real Estate at the University of San Diego and CoStar Group, Inc., have produced what they call the first comprehensive nationwide analysis on the financial benefits of green office buildings.
The study focused on green buildings that carry the Energy Star rating, which is provided by the US Environmental Protection Agency (EPA). Some of the buildings are also LEED-certified, which is a designation of the US Green Building Council (USGBC).
The research focused on 435 “green” and 238,808 “other” Class A Office Buildings. The buildings were drawn from CoStar’s nationwide database and controlled for size, floors, class, and age.
The research findings revealed:
- Green buildings have higher occupancy rates and lower operating expenses than non-green buildings;
- Green buildings observed higher rental rates by almost $2 dollar per square foot per year net in the second quarter of 2007 and $2.65 higher in the third quarter of 2007; and
- Green buildings command sales prices of 30 percent more on average when compared with other buildings, specifically, $352 per square foot vs. $270 per square foot for last year’s transactions. This reportedly far exceeds even pessimistic incremental cost estimates to achieve Energy Star or LEED certification.
The research also concludes that new office buildings that are not trying to achieve substantial energy savings and improved environments for occupants are likely to become obsolete much quicker than their green counterparts. Less than one percent of all buildings are currently green, although the numbers are rapidly increasing.
For the full study and a glossary of green terms, visit the Burnham Moore Web site.
