Green Building Gains Office Owner Acceptance

CHICAGO-The value of green building is undeniable, and delivered well during the recession, according to a study released at the US Green Building Council’s Greenbuild Expo that began Wednesday here. The “Business Benefits of Green Buildings SmartMarket Report” is a collaboration of McGraw-Hill Construction, CB Richard Ellis and the University of San Diego’s Burnham-Moores Center for Real Estate.

The study measured how commercial building owners, managers, tenant firms and occupants perceive the benefits of green buildings. This report follows McGraw-Hill’s “Green Outlook 2011 Report”, which predicts that sustainable development will hit $135 billion by 2015.

According to the new study, owners of sustainably managed buildings anticipate a 4% higher return on investment; 5% increases in building value and occupancy; 8% drops in operating costs; and a 1% rise in rental income. Roughly 79% of owners surveyed in the study believe that green helps them attract and retain tenants, a distinct competitive advantage in a difficult economy. Furthermore, more than 70% of surveyed office building owners are already engaged in greening a significant percentage of their portfolio.

"This study underscores the viability of sustainable buildings as smart investments," said Dave Pogue, national director of Sustainability, Institutional and Corporate Services at CBRE. "In addition to the higher occupancy and rental rates we've seen throughout the study's two-year history, the study demonstrates that sustainable practices yield measurably better investment fundamentals.”

Harvey Bernstein, VP at McGraw Hill, said that owners are driven by the financial benefits of green development, such as a 5% building value increase and an additional 4% ROI. He said health issues are also a factor. "The impact of green on human health and productivity is the holy grail of green building results," Bernstein said. "While this study measures significant benefits perceived today, further measurement is needed to fully capture it. A full update to the CBRE 2009 report “Do Green Buildings Make Dollars and Sense?” is expected to be released later this year.