Abstract

http://ssrn.com/abstract=1662720
 
 

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Green Noise or Green Value? Measuring the Effects of Environmental Certification on Office Values


Franz Fuerst


University of Cambridge - Department of Land Economy; City University of New York - Center for Urban Research

Patrick M. McAllister


University of Reading - Department of Real Estate and Planning

August 20, 2010

Real Estate Economics, Vol. 39, 2010

Abstract:     
This study investigates the price effects of environmental certification on commercial real estate assets. It is argued that there are likely to be three main drivers of price differences between certified and non-certified buildings. These are additional occupier benefits, lower holding costs for investors and a lower risk premium. Drawing upon the CoStar database of US commercial real estate assets, hedonic regression analysis is used to measure the effect of certification on both rent and price. The results suggest that, compared to buildings in the same submarkets, eco-certified buildings have both a rental and sale price premium.

Keywords: green buildings, LEED, Energy Star certification, hedonic models, commercial real estate, appraisal, partial equilibrium, price premium, innovation diffusion

Accepted Paper Series


Not Available For Download

Date posted: August 23, 2010 ; Last revised: June 13, 2014

Suggested Citation

Fuerst, Franz and McAllister, Patrick M., Green Noise or Green Value? Measuring the Effects of Environmental Certification on Office Values (August 20, 2010). Real Estate Economics, Vol. 39, 2010. Available at SSRN: http://ssrn.com/abstract=1662720

Contact Information

Franz Fuerst (Contact Author)
University of Cambridge - Department of Land Economy ( email )
19 Silver Street
Cambridge, CB3 9EP
United Kingdom
City University of New York - Center for Urban Research
CUNY The Graduate Center
New York, NY 10011
United States
Patrick M. McAllister
University of Reading - Department of Real Estate and Planning ( email )
Reading RG6 6AW
United Kingdom
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