by Rebecca Walker — July 29, 2009—On a national level, tenants are springing for sustainable and energy-efficient buildings, according to recent studies that have revealed higher-than-normal occupancy levels and rental rates at those properties. But on an individual property level, how exactly are those claims playing out?
Cascadia Region Green Building Council, Cushman & Wakefield and the Vancouver Valuation Accord examine that question in a new study, High Performance Green Building: What’s it Worth?
The study looks at two office buildings in the Pacific Northwest and one in Canada to determine how sustainability and energy efficiency are affecting property value. Although the answer to that question is complicated, the study did find that green attributes are having a positive impact on all three properties. The property is available online.
Both of the U.S. buildings are LEED-certified and outperformed their non-green peer buildings in several categories, the study concluded after reviewing actual operational and tenant data.
Yet, the question of how exactly those premiums translate into value is less clear, the study indicated, as the financial and investment communities try to balance the many factors now affecting green buildings.
“For anything that doesn’t have a lot of documented historical precedent, it’s a challenge for valuation professionals,” said Theddi Wright Chappell, managing director of Cushman & Wakefield’s Washington Valuation Services group and leader of the firm’s National Green Building and Sustainability Valuation and Advisory Practice, who co-authored the study.
The value of a green building can depend on the ability of an owner to capitalize operational efficiencies, the study said.
In other cases, value depends on specific market conditions like demand, regulation and the availability of resources. A green building in Oregon that conserves water would be valued differently than the same building in Arizona, where water conservation is more critical, Wright Chappell said. Similarly, the value of an energy-efficient building in heavily regulated Europe is more than in the United States.
