Rental Effect Study: Which Green Office Building Features Do Tenants Pay For?

A 2017 study shows that green features such as natural light, efficient HVAC, water conservation, public transit, an electric car charging station, an onsite fitness facility, and access to services with the presence of green labels significantly contribute to rental premiums independent of the green labels and persist as value enhancements. The study is published in the Journal of Real Estate Research's October to December 2017 Volume by researchers Robinson Spenser Simons Robert, and Lee Eunkyu. The paper studies the effects on gross rental lease rates independent of the LEED (1) and ENERGY STAR (2) designations and finds that green labels convey to the market the presence of superior air, efficient systems, and recycling. A summarization of several studies on the positive impact of LEED or ENERGY STAR designation on rents is published in the original report. Miller et al. (2008) find that ENERGY STAR-certified buildings have a 9% rental premium compared to non-certified buildings. Side note: (1) Leadership in Energy and Environmental Design (LEED) is a rating system devised by the United States Green Building Council (USGBC) to evaluate the environmental performance of a building. (2)ENERGY STAR is a U.S. Environmental Protection Agency voluntary program that helps businesses and individuals save money and protect our climate through superior energy efficiency. To read more, please visit: http://aresjournals.org/doi/abs/10.5555/0896-5803.39.4.467?code=ares-site