Learn about the advantages of LEED Certification and High-Performance Design for commercial property owners. Investing in these features can lead to enhanced marketability, greater profits, and improved indoor air quality, energy efficiency, and occupant comfort.
As a property investor, you are always looking for ways to increase the value of your investment. One of the most efficient and effective ways to do this is by investing in green building solutions. By taking advantage of LEED certification—a globally recognized symbol of sustainability—you can add additional value to any structure while improving occupant satisfaction and reducing energy costs. This article will discuss the advantages of leveraging LEED certification and provide tips to help you maximize your ROI.
What Is LEED?
LEED, or Leadership in Energy and Environmental Design, is a globally recognized green building rating system developed by the U.S. Green Building Council (USGBC), and provides a framework for assessing and recognizing buildings that meet established criteria of sustainability and energy efficiency. The LEED certification process is organized into four levels, ranging from “Certified” to “Platinum,” with each level offering progressively higher levels of performance in the areas of energy efficiency, indoor environmental quality, water conservation, materials selection and waste management.
LEED certification is quickly becoming an important factor for any property owner looking to maximize the value of their real estate investments. According to Statista, LEED is one of the most popular green building certification programs worldwide, with more than 96,000 LEED projects in 167 countries and territories. Moreover, The green building materials market size was valued at $237.3 billion in 2020, and is projected to reach $511.2 billion by 2030, growing at a CAGR of 8.1% from 2021 to 2030.
Recent research from Cushman & Wakefield indicates that LEED-certified Class A office buildings offer a greater return on investment than their non-LEED counterparts. By studying rental data collected between 2010 and 2020, they found that LEED-certified properties achieved 11% higher rent in the past five years, experienced lower vacancy rates, sold for higher prices and were increasingly in demand during the Covid-19 pandemic.
Moreover, LEED-certified buildings command the highest rents, while lease-up rates typically range from average to 20% above average; vacancy rates for green buildings are an estimated 4% lower than non-green properties.
Increasing Property Value With LEED
1. Invest in Low Emissions Systems
One of the best ways to increase your property’s value with LEED is to invest in low emissions systems. By investing in energy efficient lighting, HVAC, and insulation systems that reduce the amount of energy you use and your carbon footprint, you can improve both the value and sustainability of your building. Additionally, installing renewable energy sources such as solar panels is another way to reduce energy costs and improve the value of your property.
LEED standard buildings not only produce 34% less CO2, but they also save on costs. These energy-efficient systems have a positive impact on the environment by keeping emissions low.
2. Implement Water-Saving Measures
Use of LEED-certified buildings between 2015 and 2018 has been shown to conserve water (saving $149.5 million), reduce maintenance costs ($715.3 million), waste ($52.2 million), and energy consumption ($1.2 billion). This is significant for property owners who are looking to boost the value of their real estate investments.
Investments that you can make in water-saving measures include low-flow fixtures and recycling greywater for irrigation. Low-flowing fixtures reduce the amount of water that goes down the drain and help conserve resources. Meanwhile, recycling greywater for landscaping purposes reduces the impact on local watersheds and can save you money in the long run. Another great way to reduce water consumption is by installing rainwater harvesting systems. These systems can be used to collect rainwater for irrigation or other uses.
3. Improve Indoor Air Quality
A recent study from Massachusetts showed that inadequate building ventilation and indoor environmental quality cost employers $840 per employee each year, which equals out to $40 billion annually on a national level. In simpler terms, if employees have access to better air quality, it could save employers millions in preventable absenteeism costs. But why should you care as the owner of a commercial building?
The answer is simple: better air quality means healthier tenants and a higher return on investment. In fact, a 120% ROI is possible (on average) as a result of investing in Indoor Air Quality Management for businesses. This is achieved through reduced absenteeism, improved employee productivity and HVAC energy savings. The numbers vary from region to region, however the World Green Building Council estimates that reduced absenteeism alone is worth $34 per sq. m., while improved staff productivity could be worth as much as $410 per sq.m. A Harvard study also calculated a change in office worker’s productivity of $6500 due to increased ventilation.
Therefore, by improving indoor air quality, you can not only improve the health and productivity of the employees inside, but also make your building more desirable to buyers or renters. This could lead to higher rental prices or a quicker sale.
Investing in features such as improved ventilation systems, air filtration systems, and formaldehyde-free carpets and furniture can go a long way towards improving indoor air quality. Additionally, use of non-toxic materials, such as low-VOC paint, can help reduce the amount of harmful off-gassing chemicals in the air.
4. High-Performance Design
High-performance design focuses on minimizing energy and water consumption through the use of energy efficient systems, as well as maximizing natural daylight in order to reduce the need for artificial lighting.
High-performance building design is becoming increasingly sought after as the advantages of this approach become more widely known. The number of nonresidential net-zero buildings has risen dramatically since 2012, rising by an impressive 700% over the past eight years. Not only do these structures provide environmental and health benefits, they also offer economic gains that become more apparent with time.
Examples of high-performance design elements include: solar panel systems, green roofs, efficient HVAC systems and building envelope designs that reduce energy loss. Installing renewable energy sources such as solar panels can be expensive upfront, but they often have long term financial benefits. Solar panels reduce monthly energy costs while providing a hedge against rising energy prices. In addition, the installation of solar panels may qualify for tax credits and other incentives.
High-performance design goes beyond just energy efficiency, it also focuses on building occupants’ comfort, health and wellbeing. To accomplish this, designers select materials that emit low levels of chemicals into the indoor environment, promoting occupant comfort and productivity. Additionally, by focusing on natural ventilation and daylight, occupants can benefit from improved mental health and well-being. This provides you with an additional layer of value beyond energy savings.
By investing in high-performance design, you can put your commercial building ahead of the curve and benefit from increased tenant productivity, greater customer satisfaction, enhanced marketability and improved sustainability. Ultimately, this could lead to higher returns on investments and greater profits for you as an owner.
LEED Certification is becoming a no brainer for commercial property owners due to the numerous advantages it brings. The new era of certification standards offers a comprehensive range of benefits, from improved indoor air quality and increased energy efficiency to enhanced occupant comfort and wellbeing. By investing in LEED certified features, you can not only reap the rewards of greater returns on investments, but also protect your building against rising energy costs in the future. Ultimately, this will help ensure the long-term success of your commercial property.
