DOE analyzing financial performance of high-performance office buildings

Evidence has shown that owning and operating energy efficient, high performance, “green” properties results in multiple benefits, including lower utility bills, higher rents, improved occupancy and greater net operating income.

However, it is difficult to isolate and control moderating factors to identify the specific drivers behind improved financial performance and value to investors that results from sustainability in real estate, according to new research from the U.S. Department of Energy (DOE).

The DOE aims to facilitate deeper investigation of the correlation between energy efficiency and financial performance, reducing data acquisition and matching challenges, and developing a stronger understanding of how sustainable design and energy efficiency impact value.

Through a new report titled “Utilizing Commercial Real Estate Owner and Investor Data to Analyze the Financial Performance of Energy Efficient, High- Performance Office Buildings,” the DOE commissioned a pilot study to test the logistical and empirical procedures required to establish a Commercial Real Estate Data Aggregation & Trends Analysis lab (Data Lab), determine the potential benefits available through the Data Lab and contribute to the existing body of evidence in the field.

The Data Lab will contain information from multiple commercial real estate owners, databases and other sources, facilitating streamlined research into and deeper investigation of the relationship between buildings’ energy and financial performance.

The study was designed to replicate similar methodologies used in prior research, which confirmed that actionable conclusions could be drawn from the data requested as part of the Data Lab initiative.

The department collected commercial office portfolio data from one institutional owner and conducted correlation and multiple linear regression analyses to test the impact of LEED or ENERGY STAR certification status on several financial variables.

The correlation analysis showed that “green” properties had higher occupancy, higher market value, net operating income (NOI) and rent per square foot and lower operating expenses and rent concessions per square foot; results akin to the existing body of research. Additionally, the regression analysis showed that green properties experience a 28.8 percent increase in NOI per square foot and a 17.6 percent reduction in operating expenses per square foot when compared to non-green properties.

These statistically significant findings indicate that green-certified properties exhibit improved financial performance when compared to non-green properties and that meaningful insights can be drawn from the data proposed for collection in the Data Lab.

 


Topics: Architectural Firms, Building Owners and Managers, Consulting - Green & Sustainable Strategies and Solutions, Data Centers - Mission Critical Information Centers, Office Buildings, Sustainable Communities, Urban Planning and Design

Companies: U.S. Department of Energy


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