Green Office Building Market Explodes

by CoyDavidson on November 16, 2010

LEED Certified Buildings Surpass 1 Billion Square Feet

Despite a challenging economy, the green building market continues to demonstrate dramatic growth. This month, the total footprint of commercial projects certified under the U.S. Green Building Council’s (USGBC) LEED Green Building Rating System surpassed one billion square feet.

Another six billion square feet of projects are registered and currently working toward LEED certification around the world.

The value of green building construction starts was up 50% from 2008 to 2010 — from $42 billion to $55 billion-$71 billion — and represents 25% of all new construction activity in 2010.The green building market size is expected to reach $135 billion by 2015, according to McGraw-Hill Construction’s “Green Outlook 2011: Green Trends Driving Growth” report.

The Green in LEED

According to the USGBC the benefits of LEED include:

  • Reduction in operating costs of 13.6% on average for new buildings and 8.5% for retrofits
  • Increase in building values of 10.9% for new buildings and 6.8% for retrofits
  • Increase in return on investment (ROI) of 9.9% for new buildings and 19.2% for retrofits.
  • 3.5% increase in occupancy
  • 3% increase in rent

Corporate Tenants

There is a growing desire among corporate leaders to achieve environmental sustainability through LEEDS certified design principles, effective energy management and building efficiency.

The corporate space user is increasing their focus on sustainability as a means to reduce occupancy and operational costs as well as their commitment to be good stewards of the environment. Despite the fact the return on investment (ROI) for such practices is still fuzzy, more and more companies are looking to occupy green office space. In lease situations this means selecting LEED certified office buildings as well as building out and operating their office space with sustainability issues in mind. Sustainability initiatives have taken hold very rapidly, and even experienced corporate real estate managers, brokers, real estate attorneys and building owners are still learning the nuances of green leases.

Here are some tips for: Negotiating a Green Lease from the Tenant’s Perspective

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