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Are green buildings more valuable than their non-green counterparts? A new study from the Urban Land Institute, BOMA International, and the Rocky Mountain Institute provides the latest piece of evidence that answers that question with a resounding “yes." The study found green building and energy efficiency strategies can increase the value of an old office building up to $800,000.
What’s interesting about this study, titled "Unlocking Hidden Value in Class B/C Office Buildings," is that it focused on upgrade strategies in buildings that aren’t your new, shiny showcase buildings. The study focused on not just the energy cost savings of these upgrades, but how energy efficiency and green building upgrades add value to the building itself.
Even with lower rents and fewer amenities than their Class A counterparts, the study says “the business case is strong to unlock hidden value in Class B/C office buildings and portfolios through energy efficiency and green leasing.”
The study provides eight low- and no-cost “building-level” strategies to help Class B/C office buildings add value for their buildings. It also provides several case studies of buildings that used simple strategies like energy audits and green leasing to reduce energy use and improve overall sustainability. “By pursuing a combination of these low-cost, high-impact strategies, owners can see increases in property NOI of over 5% and value increases in the hundreds of thousands of dollars — not to mention other benefits like improved tenant retention, easier compliance with regulations, and upside from repositioning opportunities,” the study concludes.
This post was submitted by Greg Zimmerman, executive editor, Building Operating Management and FacilitiesNet.com. Read his cover story about Chris Walinski and his mission to make open offices flexible and productive.