Benefits of green office buildings

The Burnham-Moores Center for Real Estate at the University of San Diego and CoStar Group, Bethesda, Md., have produced a comprehensive nationwide analysis on the financial benefits of green office buildings. The study focuses on green buildings that carry the Energy Star rating, provided by the U.S. Environmental Protection Agency. Some of the buildings are also USGBC LEED-certified.

The research focuses 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.

Study findings include the following: Green buildings have higher occupancy rates and lower operating expenses than non-green buildings. Also, green buildings observed higher rental rates by almost $2 per sq. ft per year net in the second quarter of 2007 and $2.65 higher in the third quarter of 2007. Finally, green buildings command sales prices of 30% more on average when compared with other buildings, specifically, $352 per sq. ft versus $270 per sq. ft for last year’s transactions.

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 quicker than their green counterparts. Less than 1% of all buildings are green, although the numbers are increasing. For the full study and a glossary of green terms, go to www.usdrealestate.com .

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