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(originally published by Booz & Company)

Seeing Green by Building Green

For commercial real estate owners, investing in green building techniques can add considerably to revenue and to profitability.

Title:
Doing Well by Doing Good? Green Office Buildings

Authors:
Piet Eichholtz, Nils Kok, and John M. Quigley 

Publisher:
Institute of Business and Economic Research, University of California at Berkeley, Working Paper No. W08-001

Date Published:
April 2008

In this study, the authors establish some of the first links between “green buildings” — that is, properties built with an emphasis on increasing energy efficiency and minimizing environmental impact — and higher rental rates and increased property values. Using a control group of nearly 7,500 commercial real estate buildings and comparing that group to nearly 694 green properties within a quarter mile of them, the authors found that landlords could command 2 percent higher rental fees and expect higher market values for their green buildings — nearly US$5 million higher, on average. The research suggests that consumers may be willing to pay a premium for socially responsible properties and landlords can use green certification programs as an effective marketing tool.

Bottom Line:
For commercial real estate owners, investing in green building techniques can add considerably to revenue and to profitability.

 

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Seeing Green by Building Green