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Anthony Buonicore is a past president and fellow member of the Air & Waste Management Association, and is the Chairman and CEO of the Buonicore Group, a real estate and energy/environmental risk management consulting company.
Tony’s blog is written for professionals in commercial real estate including: owners, brokers, lawyers, investors, managers, architects, contractors, equipment vendors and energy suppliers. The focus of our blog is energy conservation in commercial real estate as a strategy to maintain and increase asset values. Topics include trends in green building design, LEED and Energy Star certification news, regulatory requirements, and trends in new solar solutions, retrofit technologies, and other issues impacting on CRE values. Join us!
From Tony’s Blog - April 27, 2008
Two recently released studies have confirmed the energy savings and increased value associated with green buildings.
The first study was conducted by the New Buildings Institute (NBI) for the U.S. Green Buildings Council (responsible for LEED certification), with support from the U.S. EPA (which has the Energy Star program). The March study measured the energy performance of 121 newly constructed LEED-certified buildings that had been occupied for at least one year. Measured energy savings on average were 28% over non-certified buildings. These savings were close to the 25% savings predicted.
The second study also published in March was conducted by the CoStar Group. CoStar analyzed over 1,300 LEED-certified and Energy Star buildings and compared them to non-certified buildings of similar size, location and tenancy. The findings showed that the LEED-certified buildings commanded a rent premium of $11.24 per square foot and had a 3.8% higher occupancy rate compared to their non-LEED certified peers. Energy Star buildings were also able to command a rent premium of $2.38 per square foot and had a 3.6% higher occupancy rate than non-Energy Star buildings. The CoStar study also showed that Energy Star buildings were selling for approximately $61 per square foot more than their non-Energy Star peers. Leed-certified buildings, however, were bringing in approximately $171 more per square foot than non-LEED certified buildings.
While more study is still needed, the results of these studies are substantiating that green buildings can save significant energy (typically 25-30%) and command a premium valuation.