Does Green Still Pay Off?

Author: Norm Miller
Date: June 2010
Comments: Norm Miller

Introduction:
In one of the earlier office property studies authored with Andy Florance and Jay Spivey entitled “Does Green Pay Off?” comparing green buildings, defined as either Energy Star labeled or LEED certified at any level, published in the Journal of Real Estate Portfolio Management, Vol.14, No.4, Oct-Dec. 2008 we found strong evidence of both significant rental premiums but also faster absorption and lower cap rates/higher prices per square foot. Since that date we have noted a flurry of buildings planned in the 2004 to 2006 period but delivered since late 2007 which have become LEED certified.1 Much of the Class A construction for new office buildings has been aimed at becoming LEED certified and in some markets, like San Francisco, it is a requirement. The timing could not have been worse for those coming on line in 2008 and 2009 and we have seen this have an impact on the latest statistics making apples to apples comparisons more challenging. Our findings and those of several academic studies suggested significant rental premiums and significant sales prices premiums.

Does Green Pay Off?

Authors: Norm Miller, Jay Spivey and Andy Florance
Date: July 2008
Comments: Norm Miller

Introduction:
In this study and call for further research we provide some comparison data on energy star and LEED certified buildings versus non-energy star or Non-Leed certified office property from the entire US using CoStar data base. These results are promising for the benefits of investment in sustainable real estate, energy savings and for the green movement now sweeping our society. The payoff from wise green investment is easy to justify even if based on purely profit motivations.