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Two Recent Studies Show Value of Energy Efficient/Green Buildings

Two recently released studies have confirmed the energy savings and increased value associated with Energy Efficient/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 2008 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.

The second study also published in March was conducted by the CoStar Group. CoStar analyzed over 1,300 Energy Efficient/LEED-certified and Energy Star buildings and compared them to non-certified buildings of similar size, location and tenancy. The findings showed that the Energy Efficient/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. Energy Efficient/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.

While much has been written and done about reducing energy in new buildings, it is clear that the greatest impact will be achieved by reducing energy in existing buildings. Fortunately, this is becoming a much higher priority in the industry.

There is a lot of fear running around and anxiety about commercial real estate fundamentals in a global recession is at an all time high. There is no doubt in my mind that any investment in property improvements will be carefully scrutinized. However, there is one thing for sure: investments that can reduce building operating costs will be given priority, so long as the return is reasonable. Reducing energy costs certainly fits this bill and brings more money to the bottom line.

With these unprecedented tax deductions in effect, now is the time to take control of your building's escalating energy costs. Customers who work with the Environmental Construction Collaborative (ECC) find that our ECC representative members can turn almost any existing roof into an energy saving asset, while extending the useful life of the roof and providing a stronger roofing system.