Tenants Prefer Sustainable Buildings, Research Finds

February 25, 2015 1808 Views Banks County, Ceres, Dan Pleasant, Eastern U.S., Greg Fischer, Investor Network on Climate R, James T. Powers, Principles for Responsible Investment, remote, The Big Four Bridge, U.S. Bancorp Community Development Corporation

CHICAGO — Tenants are happier with buildings that make an effort to be sustainable, researchers at Chicago-based DTZ, a real estate and property investment company, have concluded.

Allison Porter, DTZ’s vice president, sustainability services, and DTZ Economist Rebecca Rockey evaluated responses to a tenant survey developed by Kingsley Associates, a research organization for the real estate industry that’s based in San Francisco. The company provides surveys for building tenants, among others.

Porter and Rockey examined three building-specific certifications based on a Kingsley survey: the U.S. Green Building Council’s (USGBC) LEED Buildings: Operations and Maintenance (LEED EB); the Environmental Protection Agency’s (EPA) Energy Star program; and the Office of Management and Budget’s (OMB) Sustainability and Energy Scorecard, a sustainability evaluation standard for federal government-occupied buildings. Porter and Rockey analyzed 61 office buildings in the Washington, D.C. region.

“This research confirms what we’ve long assumed — that sustainability impacts how tenants perceive their workplace,” said Marla Maloney, president, asset services, Americas at DTZ, in a statement. “It also bolsters previous research linking sustainability to improved property values and returns. Sustainability is not only a measure to improve our built and natural environment, it’s also a sound, forward-thinking business practice with a proven, positive business impact, from lowering costs to improving client services and satisfaction.”

The research findings highlighted several facts. First, buildings with at least one sustainability certification had an average Kingsley score 7 points higher than buildings with no certifications. Additionally, buildings with one certification had slightly higher tenant satisfaction scores than those with no certifications, while buildings with two or more certifications had significantly higher scores.

Researchers also concluded that Energy Star buildings averaged 30 points higher than their non-Energy Star counterparts when rated by Kingsley. Scores for LEED EB buildings also averaged 10 points better than buildings without a LEED EB certification.

Finally, researchers found that the OMB Sustainability and Energy Scorecard did not have a statistically significant impact on tenant satisfaction scores.

“Sustainability proponents often make claims about the benefits of environmental responsibility without offering proof. We’d rather rely on the facts–we serve our clients best when we offer evidence-based advice," Porter said in a statement. “These findings are an excellent basis to continue our research on the interaction between sustainability efforts and key business drivers. Building owners and users alike can use this kind of data to make better real estate decisions.”

DTZ manages 3.3 billion square feet and $63 billion in transaction volume globally on behalf of institutional, corporate, government and private clients.