A study by real-estate giant Bentall Kennedy has found that buildings certified as sustainable under systems such as LEED and BOMA Best seriously outperform others.
Published in the September 2015 issue of the Journal of Portfolio Management, the study was done by Dr. Avis Devine of the University of Guelph and Dr. Nils Kok of Maastricht University in the Netherlands.
It analyzed financial data from the last 10 years for nearly 300 office properties in North America. It included rents, rent concessions, lease renewal rate and occupancy rates. It also looked at tenant satisfaction scores and energy and water consumption.
The findings showed, for example, that in the U.S. net effective rents, including the cost of tenant incentives, average 3.7% higher in LEED certified properties.
In Canada occupancy rates were 18.7% higher in buildings having both LEED and BOMA Best certification than in non-certified buildings. In the U.S., buildings that had ENERGY STAR certification had occupancy rates 9.5% higher.
Tenant renewal rates in Canadian buildings with BOMA BESt Level 3 certification were 5.6% higher than those without it.
Energy consumption in U.S. properties certified by LEED was 14% lower than in non-certified buildings.
Giselle Gagnon of the strategic resources group at Bentall Kennedy, said: “Previous studies have suggested similar correlations but none of these looked at in-depth, diverse metrics across a large portfolio for as long as 10 years. Investors want evidence to support the economic merits of investing in sustainable buildings, and this new academic research provides exactly that.”
To access the study, click here.