Because green buildings—those certified as such by the EPA’s Energy Star program or U.S. Green Building Council’s LEED program—are historically a relatively new phenomenon, data to back the energy and financial performance of these structures has been relatively difficult to come by. It is that way in the lodging industry because there are just a handful of hotels that are LEED certified and only about 250 properties that are Energy Star rated. For those wanting to build a case for building green, two recently released studies should help immensely. Even though the studies are not specific to lodging, I believe they are very relevant and should shake any non-believers out of their shoes.
The first study, by the New Buildings Institute (NBI), shows that new buildings certified under the LEED certification system are, on average, performing 25 to 30 percent better than non-LEED buildings in terms of energy use. The study also demonstrates that there is a correlation between increasing levels of LEED certification and increased energy savings. Gold and Platinum LEED certified buildings have average energy savings approaching 50 percent. The study also concludes that buildings that have earned the Energy Star label use an average of almost 40 percent less energy than average buildings, and emit 35 percent less carbon.
The second study, by the CoStar Group, addresses the concern I hear most often at industry events: the impact of green building on the actual value of the asset. Interestingly, the CoStar study found that green buildings outperform their non-green peer assets in key areas such as occupancy, sale price and rental rates—sometimes by wide margins. Here are some findings from the CoStar study that should excite any green hotel developer.
LEED buildings command rent premiums of $11.33 per square foot over their non-LEED peers and have 4.1 percent higher occupancy. Rental rates in Energy Star buildings represent a $2.40 per square foot premium over comparable non-Energy Star buildings and have 3.6 percent higher occupancy.
Energy Star buildings are selling for an average of $61 per square foot more than their peers, while LEED buildings command a remarkable $171 more per square foot.
More Than 1,000 Buildings Analyzed
CoStar analyzed more than 1,300 LEED certified and Energy Star buildings representing about 351 million square feet in CoStar’s commercial property database of roughly 44 billion square feet, and assessed those buildings against non-green properties with similar size, location, class, tenancy and year-built characteristics to generate the results.
“The information we’ve discovered is very compelling,” says Andrew Florance, president and CEO of CoStar. “Like all good science, we discovered it by accident. Green buildings are clearly achieving higher rents and higher occupancy, they have lower operating costs, and they’re achieving higher sale prices.”
One of the reasons for the premium paid for green buildings is their rarity. Supply has not kept up with demand. In the lodging industry, that is certainly true, with only a tiny portion of the U.S. hotel supply consisting of green buildings.
Since its launch in July 2006, Green Lodging News has reported on billions of dollars of green hotel developments. It is clear our industry is trending toward smart building. With these two studies, it has much more evidence to make its case. The studies also demonstrate that it is time for our own industry’s research organizations to begin measuring green hotel financial performance, value, etc.
Click here to read the article on the studies and to link to the studies themselves.
GLN Welcomes Lighting Supply Co. as Directory Partner
Green Lodging News welcomes Lighting Supply Co. as a Green Product & Service Directory partner. Lighting Supply Co., Ferndale, Mich., offers more than 6,500 top selling lamps, ballasts, fixtures and dimming systems. Its energy-saving products can reduce operating expenses. Servicing the hospitality industry for 25 years, the company’s sales and customer service staff are industry certified. Call (800) 544-2852, e-mail info@lightingsupply.com, or click here for more information.
Earth Day Plans?
If you are planning any Earth Day activities at your property or anywhere else, please call or write with the details. I would like to mention some of the best plans in a future column.
As always, I can be reached at editor@greenlodgingnews.com.
