New analysis helps explain the value of green commercial buildings

Green building may be booming, especially in the Northwest, but the claims made for high-performance buildings have been slow to gain traction in the financial community. Appraisers, lenders, investors and brokers have found it difficult to confirm the value of high-performance green features and related savings. A new study of office buildings in Seattle, Portland and Vancouver, BC by the Cascadia Region Green Building Council, the Vancouver Valuation Accord and Cushman & Wakefield identifies how high-performance green features and systems can increase the value of commercial buildings. The report, funded in part through Evergreen Business Capital's Green Initiative, outlines how value was achieved and how sustainable attributes impact costs, savings, investment income, and capital value. It is a tool to help bridge the gap in understanding between the green building and financial communities. 

The value proposition for each of the three buildings is as follows:

• 200 Market Place in Portland, OR (LEED-EB) - This property leads by example with its green retrofit. It has competitive rents and higher levels of occupancy than its non-green competitors. The building also has declining operating expenditures after certification.
• Alley24 East in Seattle, WA (LEED-CS) - This building had a comparatively quick absorption period, attracted and retained high quality tenants, achieved competitive rents, and now has higher-than-average levels of occupancy.
• Vancouver Centre in Vancouver, BC - This project achieved a 19% Return on Investment from undertaking an energy-efficient retrofit, as well as the potential for higher rates of return through the use of a different lease structure.

"This research makes much-needed progress in explaining how sustainable building attributes affect value," says Brandon Smith, Chief Operating Officer of the Cascadia Region Green Building Council. "The design and construction communities will benefit from a better understanding of how value is determined and achieved by green strategies, so they can communicate more effectively with owners and developers. The financial sector will benefit from understanding how to increase asset value through more sustainable approaches."

Download the report on the Cascadia website.