An independent, 10-year study of 300 office buildings in Canada and the United States shows that going green dramatically improves the bottom line for office landlords and developers.
Nils Kok of Maastricht University in the Netherlands and Avis Devine of the University of Guelph in Ontario conducted the study, which was published in the September 2015 Journal of Portfolio Management
. The research analyzed 10 years of financial performance data across an office portfolio totaling 58 million square feet (34 million square feet in the U.S., 24 million square feet in Canada).
Sustainable buildings in the study included those designed to LEED (Leadership in Energy & Environmental Design) standards, U.S. Energy Star certification and BOMA Best, an international energy performance guideline from the Building Owners and Managers Association.
The buildings in the study are all from Bentall Kennedy’s North American office portfolio and include Vancouver properties.
Study highlights include:
•Net effective rents, including the cost of tenant incentives, average 3.7% higher in LEED-certified properties in the U.S. than in similar non-certified buildings.
•Rent concessions for LEED and BOMA Best buildings in Canada are on average 4% lower than in similar non-certified buildings.
•Occupancy rates during the period were 18.7% higher in Canadian buildings having both LEED and BOMA Best certification and 9.5% higher in U.S. buildings with Energy Star certification than in buildings without certifications.
•Tenant renewal rates were 5.6% higher in Canadian buildings with BOMA Best certification than in buildings with no BOMA Best certification.
•Energy consumption per square foot was 14% lower in U.S. LEED-certified properties than in buildings without certification.
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A new study points to the advantages netted by landlords who go green by certifying their office properties sustainable, which include lower vacancies and higher rents.