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The commercial green market is expected to grow annually by 18%, reaching nearly $82M by 2015, because more and more developers and tenants alike are seeing the value provided. The most recent studies show that green building need not cost more and could actually cost less than conventional construction, and the added value can be significant.
For office tenants, the business case for green building is compelling. For new projects, operating costs improve 13.6% on average, up to 30%. But hard costs (lease and utilities) represent only about 10% of a company’s annual investments, while the remainder—over 90%—goes to personnel. Building a healthier workspace, with abundant daylight, fresh air, and connection to the outdoors, can boost productivity and lower absenteeism (up to 15%) by improving health and satisfaction among workers.
For developers intending to attract premium tenants, “green” office buildings generally enjoy higher property value, rents, and occupancy rates. For example, on average a 10% reduction in energy use typically results in an additional 1.1-1.2% increase in market value. Similarly, for every $1.00 psf savings in operating expenses, property value can increase by $10.00 psf, based on a 10% market capitalization rate.