CoStar Confirms Value of LEED-certified and Energy Star Buildings

by Shannon Sentman, LEED AP, Holland and Knight, LLP

Andrew Florance, president and CEO of CoStar Group, Inc., speaking at a DCBIA breakfast on March 13, presented results of recent CoStar Group research on the added value of LEED-certified and Energy Star-rated buildings in the U.S. and in the Washington, DC market.

Mr. Florance was one of five presenters at the D.C. Building Industry Association’s (DCBIA) March 13th program “The Continuing Evolution of the Green Revolution.” The highlight of Mr. Florance’s presentation was a statistical comparison of traditional commercial investment properties against LEED and Energy Star rated buildings. The data presented showed significantly increased occupancy rates, rents and sale prices for LEED and Energy Star buildings. Buildings achieving both ratings showed the biggest increases.

The statistics showed that compared to their peer group, on the national level LEED-rated buildings demanded an increased rent of over $11.00 per square foot, with the D.C. market showing an increase of over $7.00 per square foot, with an average occupancy increase of 3%. In addition, Mr. Florance indicated that CoStar Group’s research demonstrated that LEED-certified buildings are achieving up to a 64% premium in per foot sales price over non-LEED buildings. The statistics show the bottom-line benefits of developing LEED and Energy Star buildings.

To date, the biggest holdback for developers of commercial investment properties has been based on the increased costs associated with developing LEED-rated buildings, which are often cited as approximately 2% to 7% over traditional projects. CoStar’s new statistics show that most project cost increases are justified by the return an owner can expect on the completed project.

Mr. Florance’s presentation is posted at: http://www.costar.com/partners/dcbia.pdf