Feb 2025
Should you pursue a sustainability certification for your office buildings?
Sustainability continues to remain important to businesses and consumers. CRE investors and owners of office buildings should take note and consider obtaining a sustainability certification for their properties.
What are sustainability certifications?
Sustainability certifications are voluntary third-party evaluations that show a company’s commitment to environmental, social and governance (ESG) practices. There are many types of sustainability certifications, but according to a September 2023 article from Sustainable Review, the top green building certifications are LEED, Living Building Challenge, Green Globes, WELL Building Standard, Green Star and National Green Building Standard.
Why do they matter?
Sustainability certificates matter to tenants, leading to gains for CRE owners. According to an August 2021 research report, "Green Is Good: Sustainable Office Outperforms in Class A Urban Markets," between 2010 and 2020, LEED-certified buildings were consistently more profitable than noncertified spaces in terms of rent and reduced vacancy. The report also found that LEED-certified assets outperformed during recession-recovery periods, and held a 21.4% higher average market sales price per square foot over non-LEED buildings from 2019-2021.
The environmental benefits of meeting certification criteria can also help a company’s bottom line. Simon and Jackson found that the environmental benefits of getting certified include reduced water and energy consumption and waste generation.
