Mortgage Banking

Making sense of commercial real estate finance.

Does Building Green Pay Off?

Posted by Jordan Crouch on November 27, 2007

Yes it does! According to an article by a university professor and two higher ups at CoStar, the online property database. The article has several good points (which I’ve summarized below), but what I found most fascinating is the following table.


Highlights of the article:

  • The green movement is led by tenants, investors (e.g. CALPERS) and some cities.
  • Costs for going green range from a low two percent to more than seven percent of total cost.
  • The typical green building is a Class A Office building with 353,000 SF, 15 floors, built in 1985, multi-tenanted and 91.7% leased.
  • Barriers to going green stem from a lack of planning and education.

It’s only a matter of time before lenders (and everyone else) acknowledges going green as a significant cost saver, a productivity enhancer as well as the right thing to do.


4 Responses to “Does Building Green Pay Off?”

  1. Rob said

    This is a great post. Thanks for pointing me to this study – it was a great read. I am very encouraged by these numbers and I am excited about the future of this trend.

  2. Rob, I’m glad you liked the study. I believe this isn’t a trend but the wave of the future. It’s only a matter of time before it becomes mandatory.

  3. Rob said

    Actually, it is interesting you mention that. I live in Florida and this past July Governor Charlie Crist made it manditory that all government owned real estate become LEED certified. That means all new buildings as well as retrofiting existing product.

  4. I haven’t heard about Florida; there is a similar mandate here in the Northwest.

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