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In a previous post, I discussed how in Autocase for Sustainable Buildings, we would be quantifying how sustainable buildings rents and occupancy are higher than non-certified buildings. Autocase for Sustainable Buildings (coming in beta at Greenbuild this week) has used information from three studies of almost 17,000 buildings (LEED and Energy Star or their comparators).

We have recently found a summary (“Studies of Price Effects of Eco-Labels in Real Estate Markets: An ‘off the record’ record” by Pat McAllister from October 2012) of 29 studies that provide 10 quantitative studies with 19 estimates of this benefit. This is a list that includes working papers and presentations and so not all of these studies meet our high research standards for inclusion into Autocase. Nonetheless, as this is an important and emerging area, I thought I’d provide the information here.

Sustainable building with lots of natural daylight and high efficiency air conditioning
Sustainable building (near Phoenix) with lots of natural daylight and high efficiency air conditioning

Below I have summarized the benefits to rent:

  Rent Increase – Both LEED & Energy Star Rent Increase – LEED Rent Increase – Energy Star
Minimum 3.3% 4.5% 2.0%
Sample Size Weighted Average 4.4% 5.9% 2.9%
Average 6.1% 7.8% 4.4%
Maximum 12.0% 16.0% 8.0%

And to the percent of building occupied:

  Occupancy Increase – Both LEED & Energy Star Occupancy Increase – LEED Occupancy Increase – Energy Star
Minimum -2.3% -5.5% 1.0%
Sample Size Weighted Average 0.5% -1.7% 2.6%
Average 5.2% 6.5% 3.9%
Maximum 13.8% 17.0% 10.5%

For those interested in the details, here are the studies with quantitative estimates that are included above:

Study Rental Rate Increase – LEED Occupancy Increase – LEED Rental Rate Increase – Energy Star Occupancy Increase – Energy Star Sample Size
Wiley, Benefield and Johnson (2010)
Published in Journal of Real Estate Finance and Economics
16.00% 17.00% 8% 11% 552
Harrison and Seiler Published in Journal of Property Investment and Finance 2011 6.50%       N/A
Fuerst and McAllister (2011)
Published in Real Estate Economics
6.00%   6%   2001
Eichholtz, Kok and Quigley (2010)
Working paper
6.00%   2%   34976
Fuerst and McAllister (2010)
Ecological Economics
4.50% -5.50% 4% 2% 5878
Fuerst and McAllister (2009)
Published in Journal of Sustainable Real Estate
  8.00%   3% 1583
Reichardt, Fuerst, Rottke and Zietz (2011)     4%   1921
Eichholtz, Kok and Quigley (2010)
To be published in American Economic Review
    3%   893
Fisher and Pivo (2009)
Draft working paper
      1% 1036
Miller. Spivey and Florance (2008)
Published in Journal of Real Estate Portfolio Management
      3% 1570

And here are all of the studies (with and without quantitative estimates). These are directly from the posted summary and are not complete references. I have all but four of the papers downloaded and so if anyone would like more information, contact me:

  1. Miller. Spivey and Florance (2008) Published in Journal of Real Estate Portfolio Management
  2. Wiley, Benefield and Johnson (2010) Published in Journal of Real Estate Finance and Economics
  3. Eichholtz, Kok and Quigley (2010) To be published in American Economic Review
  4. Fuerst and McAllister (2011) Published in Real Estate Economics
  5. Chegut, Eichholtz, Kok and Quigley (2010) Draft working paper
  6. Dermissi (2009) Published in Journal of Sustainable Real Estate
  7. Fuerst and McAllister (2009) Published in Journal of Sustainable Real Estate
  8. Fisher and Pivo (2009) Draft working paper
  9. Deng, Li and Quigley (2011) Regional Science and Urban Economics forthcoming
  10. Shimizu (2010) Draft working paper
  11. Brounen and Kok (2011) Journal of Environmental Economics and Management
  12. Fuerst and McAllister (2010) Ecological Economics
  13. Eichholtz, Kok and Quigley (2010) Working paper
  14. Yoshida and Sugiura Presented in March 2011
  15. Jaffee, Stanton and Wallace (November 2010) Working paper
  16. Zheng, Wu, Kahn and Deng Feb 2011
  17. Fuerst and McAllister Energy Policy, published 2011
  18. Kok and Jennen Energy Policy (2012) Available online.
  19. Harrison and Seiler Published in Journal of Property Investment and Finance 2011
  20. Newell, McFarlane and Kok Report for Australian Property Institute September 2011
  21. Das, Tidwell and Ziobrowski (2011) Published in Journal of Sustainable Real Estate
  22. Fuerst, van de Wetering and Wyatt (2012)
  23. Reichardt, Fuerst, Rottke and Zietz (2011)
  24. Chegut, Eichholtz and Kok (2012) Published by RICS
  25. Aroul and Hansz (2012) Published in Journal of Real Estate Research
  26. Australian Bureau of Statistics (2007) Report for Department of Environment, Water, Heritage and the Arts
  27. Fuerst, Gabrieli and McAllister (2012) Non-refereed paper presented at ARES conference
  28. Kok and Kahn (2012) Publication produced by UCLA
  29. Hyland, Lyons and Lyons University of Oxford, Working Paper

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