Energy Efficiency and Property Value

 

Rating and Disclosure: Rewarding Efficiency in the Market

You can't manage what you haven't measured. Yet most U.S. building owners, including governments, have not measured the energy efficiency of their buildings, limiting their ability to manage and reduce energy consumption. Rating the energy efficiency of buildings empowers owners with information to set efficiency goals, track building efficiency over time, identify and replicate best practices in building operations, and prioritize investments in energy audits, retrocommissioning and retrofits. These measures can directly and indirectly lead to significantly lower utility bills and higher profit margins. But that's just half the story.

According to research from leading academic institutions, properties with superior energy efficiency ratings have higher occupancy levels, lease rates and sale prices than less efficient properties. Tenants and real estate investors are demanding efficient properties and, in many cases, paying a premium to lease or own where energy costs are lower. Banks and insurance companies are beginning to reward efficient property with better financing and lower premiums.

Simply put, efficient buildings are more competitive buildings. This trend will likely accelerate as more buildings are rated and more ratings are disclosed, while also exerting pressure on less efficient buildings to improve their energy performance.

 

Studies on Energy Efficiency and Property Value

Energy Efficiency and Real Estate: Opportunities for Investors | Ceres and Mercer

Does Green Pay Off? | CoStar Group and University of San Diego Burnham-Moores Center for Real Estate

Do Green Buildings Make Dollars and Cents? | CB Richard Ellis and University of San Diego Burnham-Moores Center for Real Estate

Investment Returns from Responsible Property Investments | Responsible Property Investing Center, Boston College and University of Arizona and Benecki Center for Real Estate Studies, Indiana University

Doing Well by Doing Good? Green Office Buildings | Institute of Business and Economic Research and University of California, Berkeley

New Evidence on the Green Building Rent and Price Premium  | University of Reading, Henley Business School

High Performance Green Building: What's it Worth? | Cascadia Region Green Building Council, Vancouver Valuation Accord and Cushman & Wakefield