Los Angeles is one of the top markets in the country for buildings with green certifications. According to research from CBRE in the firm's annual Green Building Index, Los Angeles ranks second in the nation for the number of buildings with green certifications, totaling 363. The report also ranks the city fourth for the amount of total square footage with green building certifications, with 56.3% of the total supply certified green.

“The high number of certifications in Los Angeles can be attributed to many factors. The first is Los Angeles' position as a “gateway” city that attracts sophisticated capital investments, from both global and national capital sources,” David Pogue, SVP of global client care and sustainability at CBRE, tells Globest.com. “These types of investors generally invest in sustainable buildings and in larger assets, because of the higher achievement in gaining certifications. The makeup of the local tenant population is also important as larger corporate users, especially in industries such as finance, engineering, or technology typically seek certified buildings to occupy. Other firms that rely on attracting younger, millennial employees also use their sustainable occupancy standards to attract and retain talent.”

In addition to demand from capital and tenants, the local government also encourages certifying green buildings, helping to boost numbers. “Local or other applicable state laws and regulations, such as “green” building codes and energy disclosure requirements have set a standard for the marketplace,” explains Pogue. “Los Angeles benefits from every one of these characteristics and this results in a higher percentage of green space. It should be no surprise that the two California cities, Los Angeles and San Francisco, which have similar profiles in these matters, are in the top 4 of the survey.”

The is a big benefit for owners that secure green certifications. They generally garner higher rental rates and higher sales prices. It is also a near requirement for class-A properties in Los Angeles. “Studies consistently show that sustainable buildings perform better in both rental rate and occupancy outcomes. Additionally, investors are now using scoring in certain sustainability protocols, such as GRESB, to aid in investment decisions,” says Pogue. “Better scores often lead to better access to capital. In many markets, LEED certification is now a proxy for a class-A building, and the most desirable occupants often seek sustainability certification as a signal for the best buildings. Green certification leads to higher rents and occupancies, better access to the capital market, and better acceptance by the most desirable market tenants.”

The real estate industry has supported the growth of green certifications in Los Angeles, and that has helped the city lead the nation in green building. In fact, CBRE's headquarters in Downtown Los Angeles was the first building in the city's Bunker Hill neighborhood to earn LEED Platinum certification. “The commercial real estate industry has really embraced sustainability, and specifically certification, as a development and management practice,” adds Pogue. “This has made the Los Angeles footprint more environment-friendly and more economical for the tenant.”

Instant Insights /

L.A. Is a Leader in Green Building Certificates

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