CBRE Research analyzed 20,000 U.S. office buildings to determine the impact of green building certifications, such as LEED and Energy Star, on rents and asset values. This study sheds light on why investors would do well to position their properties to capitalize on growing demand for green buildings.
Key Findings
• The average rent of office buildings with LEED certification, which denotes a high degree of energy efficiency and environmental responsiveness, is 31% higher than that of non-LEED-certified buildings.
• When accounting for the effects of building location, age and renovation history, LEED-certified buildings still command an average 4% rent premium.
• The rent premium can be larger for Class B office buildings and allow them to avoid suffering from a “brown discount,” which could hamper lease-up efforts.