Green buildings make owners more cash

We all know that green buildings are good for the environment. But how well do they perform financially? 

According to a new report by RICS, a U.K.-based consultancy, entitled “Sustainability and the Dynamics of Green Building: New Evidence on the Financial Performance of Green Office Buildings in the USA,” commercial buildings with a low carbon footprint can offer a real economic boon to investors, even in tough times.

The authors of the report are Piet Eichholtz and Nils Kok of Maastrict University, along with John Quigley of the University of California, Berkeley. 

The report was presented on February 22 of this year at the New York University’s Schack Institute of Real Estate, Center for the Sustainable Built Environment’s 1st Annual Conference on Sustainable Real Estate.

The research presented was based on a follow-up to a study carried out by the same research team before the onset of the financial crisis, and confirms that even in tough economic times, office buildings with green ratings tend to command rents substantially higher than those of otherwise identical buildings (even those of similar quality and in similar locations).

The findings – which are based on North American data for buildings certified by the Environmental Protection Agency’s Energy Star Program – also shows higher occupancy rates for green office buildings and lower risk premiums during the 2007 to 2009 recession period than for properties that were not designed with energy-efficiency in mind. 

A full copy of the RICS report will be available soon online.

Susan DeFreitas, EarthTechling