Doing Well by Doing Good

energy_consultantAn RICS report titled Doing Well by Doing Good? Is an analysis of the financial performance of green office buildings in the USA conducted by Piet Eichholtz and Nils Kok of the University of Maastricht and John Quigley of the University of California, Berkeley 30 March 2009.

What is interesting for green building owners concerned with the potential return from Green building, well lets quote from the report summary:

The overall conclusion is that there is, indeed, a premium for the rents that ‘green’ buildings with the Energy Star rating can command, but no premium could be found for LEED-rated buildings.

Obviously, it varies according to a number of factors, but the aggregate premium for the whole sample is in the order of 3% per square foot compared with otherwise identical buildings – controlling for the quality and the specific location of office buildings. When looking at effective rents – rents adjusted for building occupancy levels – the premium is even higher, above 6%. The researchers were also able to look at the impact on the selling prices of green buildings, and here the premium is even higher, in the order of 16%.

Another study from USA confirms the healthy financial benefits from green buildings, particularly that handsome +16% for sale of green properties. Interestingly, this study does not supporting the same financial return for LEED rated properties.

Comparisons

Before jumping to conclusions remember that these rating tools are fundamentally different, with diverse rating criteria.  LEED is based on the whole, the sustainability of a building at design stage, whereas Energystar has a limited scope, and I am sure some would argue is rightly focused, based on real-life operational energy data.

Future Drivers

The future of Green Building will still be driven by corporations, demand based requirements for  environmentally sound structures to conduct business.   However, as the pressure to act upon climate change increase the carbon element  will increasingly drive a green rating systems, and operations will still hold the largest portion of the lifetime cost.

John Herbert
consultant
EnergyLAB

About John A. Herbert, REA, energy consultant, BEAM Pro

John is director of energyLAB energy consultants firm, he has with more than 30 years engineering experience gained across three continents. He is Registered Energy Assessor, a member of HKAEE. Read his blog at http://www.johnherbert.hk
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