A study conducted by the University of San Diego and CB Richard Ellis Group Inc. (CBRE) has found that tenants in green buildings experience increased productivity and fewer sick days, and that green buildings have lower vacancy and higher rental rates. The report, ‘Do Green Buildings Make Dollars and Sense?’, is the product of a year-long research effort and is the largest study of its kind to date.
The research also found that tenants in green buildings are more productive, based on two measures: the average number of tenant sick days and the self-reported productivity change. Respondents reported an average of 2.88 fewer sick days in their current green office versus their previous non-green office, and about 55% of respondents indicated that employee productivity had improved.
Based on the average tenant salary, an office space of 250 square feet per worker and 250 workdays a year, the decrease in sick days translated into a net impact of nearly $5 per square foot occupied, and the increase in productivity translated into a net impact of about $20 per square foot occupied.
The study additionally showed that green buildings have 3.5% lower vacancy rates and 13% higher rental rates than the market.
"The results of this project are beginning to demonstrate the very real and positive impact of sustainable buildings for both our owners and tenant occupants," says Dave Pogue, CBRE's national director of sustainability. "We have been seeking ways to make an empirical case for the economic benefits of sustainable practices, and the results of this study exceeded our expectations."
The research effort surveyed 154 buildings under CBRE's management, totaling more than 51.6 million square feet and housing 3,000 tenants in 10 markets across the U.S. The study defined a green building as those with LEED certification at any level or those that bear the Environmental Protection Agency's ENERGY STAR label. All of the ENERGY STAR buildings in the survey group had been awarded that label since 2008. Most of the buildings included in the research had also adopted other sustainable practices, such as recycling, green cleaning and water conservation.
"We have now confirmed in this and other studies that green features and energy savings pays off," adds Norm Miller, academic director at the University of San Diego's Burnham-Moores Center for Real Estate. "Tenants care about healthy, energy-efficient buildings. We also know that green leases and managing to a new and higher standard will soon become the norm. Commercial real estate players have no choice but to learn how to be better in a sustainable way. We know the economics of green will drive the market – not altruism or concern about global warming."
The survey also indicated that 18% of tenants are willing to pay more for green space and that tenants believe healthy indoor environments positively impact staff retention (61%) and client image (70%).
Additionally, 71% of respondents felt that green-lease provisions are increasingly important. According to the study, each additional point of ENERGY STAR rating saved 0.8%Â to 1% in electricity, and separate metering yielded a 21% energy savings – more than any other factor.