The University of California Berkeley has conducted a study that shows that green labeled buildings command higher market rents per square foot resulting in higher selling prices and values of buildings. Conclusions of this study are found below.
The results clearly indicate the importance of a green label in affecting the market rents and values of commercial space. The results suggest that an otherwise identical commercial building with an Energy-Star certification will rent for about three percent more per square foot; the difference in effective rent is estimated to be about six percent. The increment to the selling price may be as much as 16 percent.
These effects are large, and they are consistent. As noted above, at prevailing capitalization rates of six percent, the increment to effective rents (estimated in Table 3) implies that the value of a green building is about $5.5 million more than the value of a comparable unrated building nearby. From Table 4, the incremental value of a green building is estimated to be about $5.7 million more than that of a comparable unrated building nearby.
To view the whole study click here.
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