Examining the Return on Investment (ROI) for Sustainable Commercial Real Estate

Greg Clark, of Foster Pepper PLLC’s construction group, delves into the ROI of green building in a recent post. Based on research from CBRE Group Inc., Cushman & Wakefield, and highlighting recent capital improvement projects by the City of Portland, Clark asserts that there is indeed an increased return for high-performance, sustainable commercial improvements.

Sustainable buildings generate stronger investment returns than traditional managed properties, according to the ongoing study of a national office portfolio managed by CBRE.  The study found that there is a higher value and an increased demand for green, and in particular for LEED® certified buildings, which is demonstrated by increased occupancy and rental rates in comparison with the general market.

The study, which surveys approximately 150 CBRE-managed office buildings and more than 2,500 building occupants, shows how green building performance continues to trend higher than the general market, establishing a clear economic case for the value of green in existing buildings, with mid-sized markets leading the trend.  In particular, aggregated data on LEED certified buildings over three years shows an average 3.1% improvement in both rental rates and building occupancy in comparison to the general market. The 2011 phase reinforces earlier findings that demonstrate sub metering of utilities for tenant space reduces energy costs by 21% on average.