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Getting More Green by Going Green: New Study Finds Strong Economic Case for Developing Green Buildings

By Womble Carlyle Construction Law Team

In recent weeks, there have been a number of news articles published on the growing trend among owners, developers and contractors in the area of "green" building and "sustainable development". Until recently, most buildings that obtained LEED certification were mostly found in the areas of higher education and government according to the U.S. Green Building Council ("USGBC"). That trend is changing in part due to the results of new studies being conducted to examine the business case for "going green".

In a recent study published by the CoStar Group ("CoStar"), LEED buildings actually outperformed their non-LEED peers in "key areas such as occupancy, sale price and rental rates, sometimes by wide margins." According to the CoStar study, "LEED buildings command rent premiums of $11.33 per square foot over their non-LEED peers and have 4.1 percent percent higher occupancy. Rental rates in Energy Star buildings represent a $2.40 per square foot premium over comparable non-Energy Star buildings and have 3.6 percent higher occupancy." One factor in the increased return on green investment dollars is the high demand for green buildings across market sectors according to the CoStar study. Nationally, the supply has simply not been able to keep up with demand.

In North Carolina, the supply of LEED certified buildings has seen a dramatic increase as many real estate investors are also lauding the financial benefits of going green. According to a recent article in The Charlotte Observer, "In search of investors, builders going green", "[w]ithin five years, buildings that aren't constructed to environmental sustainability standards likely will have difficulty finding investors, experts predict." According to a recent article in the Triangle Business Journal, "Eco-friendly groups rise in shadow of LEED ratings agency", there are some 26 LEED certified buildings in North Carolina. Of these, over half are located in the Triangle according to the TBJ. There are also some 54 projects in the Triangle that are currently being considered for LEED certification according to the USGBC. Based on these numbers, which reflect a 100% increase in the total number of North Carolina LEED certified projects, just in the Triangle, it appears that the business case for going green is being realized here in the Triangle and across North Carolina and that owners, developers and contractors are likely to see more green by going green in the future. (This entry published by Culley Carson, a member of Womble Carlyle's construction law practice group.)

Full post as published by Womble Carlyle Constrution Industry Blog on April 09, 2008 (boomark / email).