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green building

Do Green Building Certifications Make Financial Sense?

green buildingAs Georgia moves closer to enacting a law that would effectively ban state-owned buildings from seeking LEED certification, Valerie Molinski, sustainability director at Vocon, a Cleveland architecture and interior design firm, makes the business case for green building certification in a Crain’s Cleveland Business blog.

Basically it boils down to cost. Green buildings save money on operating costs, they sell for higher prices and they have a better return on investment than less efficient buildings.

Molinski cites a McGraw Hill Construction study that found the ROI for green building owners improved by more than 19 percent on existing buildings and almost 10 percent on new construction projects.

Additionally, Energy Star and LEED buildings improve rental rates to 20 percent above average and increase selling prices up to $20 per square foot more than buildings without certifications.

And because LEED-certified building use 25 percent less energy, they cut operating costs by 19 percent and reduce average water usage by 15 percent.

In addition to the explicit financial benefits, Molinski says green building certifications can give your brand a boost, differentiating it in the marketplace and helping to attract and retain clients and employees.

Plus, benchmarking adds credibility to your claims. Third-party verification provides proof that your building has achieved a certain level of sustainability — another public relations plus.

Molinski’s not alone in advocating for green building certification.

Some 96 percent of Fortune 200 companies surveyed use the LEED green building program to support their sustainability efforts, according to a study published this week by USGBC and Keybridge.

The survey also found 60 percent believe LEED positively impacts their ROI and 70 percent stated they pursue LEED as a means to save money.

Takeaway: Green buildings save money on operating costs, they sell for higher prices and they have a better return on investment than less efficient buildings. Plus they can help improve branding and marketing efforts.

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4 thoughts on “Do Green Building Certifications Make Financial Sense?

  1. There’s no guarantee that Georgia will, in fact, stopped state buildings from seeking LEED certification. Of course the only reason for this proposed law is to increase the use of lumber grown in Georgia so don’t make it sound like they’re against green buildings in the peach State.

  2. Curious the source of these metrics “improve rental rates to 20 percent above average and increase selling prices up to $20 per square foot more than buildings without certifications”. Thx!

  3. I don’t see there has been a controlled study done to prove that certification is worth it. If a building has all the green features that achieve the energy savings, and so on, but is not certified, does it command the same value in the market? Is the value of certification that acquisition of the building does not require analyzing the building (at a cost) for the green-ness or sustainability of the building? Finally, are occupants willing to pay higher rents for a non-certified building that has all the green features? It’s essential to isolate the issue and test the proposition.

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