Greener office buildings are worth more to landlords and real estate investors. That’s what a team of American and Dutch economists found when they compared green-certified office buildings from across the U.S. to similar buildings without green ratings in the same neighborhoods. On average, the study shows, a green-certified office building is worth $5.6 million more than an office building without any certifications.
The economists, lead by Nils Kok, a visiting scholar at the University of San Francisco at Berkeley, compared green-certified buildings to traditional buildings using a national real estate information database. They found that rents at green buildings were 2%-6% higher, and sold for up to 13% more than buildings without green certification.
The initial study was done before the real estate bubble burst in the U.S., Kok says, but the study tracked the buildings through the crisis and found that in today’s tough real estate market, having a green certification may not command a higher rent, but it will make the office space more likely to be rented at all.
The exact shade of green certification matters. A Leadership in Energy and Environmental Design (LEED) certification from the U.S. Green Building Council is worth more than an Energy Star rating, perhaps because LEED addresses a wider range of building features. And a gold or platinum LEED rating is worth more than LEED’s entry-level certification.
The study found that dollar for dollar, investors recouped their investment in green building certification, challenging the conventional wisdom that certification is more about doing good than breaking even.