A new study by Canada’s University of Guelph, finds buildings that are more sustainable, using natural resources more efficiently, and environmentally responsible are able to command higher rents, have higher occupancy rates, and maintain more satisfied tenants.
The study was based on data collected from 2004 to 2013—a period that included a boom, a bust, and a recovery in the commercial real estate industry—and involved 148 office buildings in Canada and 143 office buildings in the United States, totaling more than 58 million square feet.
According to Stephen Ashkin, CEO of Sustainability Dashboard Tools, LLC and the leading consultant for sustainability in the professional cleaning and building industries, researchers were interested in buildings that met energy and sustainability standards based on three certification programs: LEED; BOMA; and Energy Star.
“This is probably the most comprehensive study ever taken to see if there is a tangible correlation between greener, more sustainable buildings and one that produces economic benefits for building owners and managers,” says Ashkin. “Previous studies have only suggested there is a correlation…this one shows there is.”
Among the highlights of the study are the following:
- When compared to traditional buildings, rents in Green and more sustainable buildings were 3.7 percent higher.
- Occupancy rates were 18.7 percent higher in Canada; 9.5 percent higher in the U.S.
- Tenant renewal rates were 5.6 percent higher in both countries.
- In Canada specifically, tenant satisfaction was 7 percent higher.*
- In the U.S. specifically, energy consumption per square foot was 14 percent lower.*
“We need more studies like this,” says Ashkin. “Studies like this make the business case for sustainability and that is something many building owners and developers are looking for.”
* Some statistics were not available for both countries.