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5 Ways a LEED Certification Can Benefit Your Commercial Real Estate

Posted by Michael Sweeney on Jul 12, 2013 10:08:00 AM

LEED-certified commercial real estate isn't just good for the environment. It's also good for your company's bottom line. Whether you're looking to reduce your company's occupancy costs or to burnish its environmental bona fides, focusing on space that has achieved certification from the U.S. Green Building Council is a good way to do it. Along the way, you may also get happier and healthier employees. While LEED space has many benefits, here are the top five:

1. Lower Operating Costs

A green building conserves energy and reduces waste - two qualities that your CFO will love. When you're paying your own utilities and repairs through a triple net lease, the cost of operating your building can come close to your rent in some markets. Reducing electric consumption through the use of natural light while you reduce wintertime gas consumption through the use of high-efficiency HVAC equipment means less expensive utility bills. At the same time, LEED-certified commercial real estate buildings are frequently constructed with long-lasting components to reduce the building's overall contribution to the waste stream.

2. Public Perception

Choosing LEED-certified buildings sends a message about your company's commitment to the environment. A study conducted by Stanford back in 2008 established that over 61% of consumers feel that business should take a leading role in protecting the environment. With the growth of Generation Y, that statistic has likely increased. With this in mind, locating in LEED commercial real estate space can be a part of a marketing and branding campaign as well as being a strategic operational decision. With the U.S. Green Building Council making LEED standards for a range of different property types beyond office buildings, you can make your customer-facing spaces greener and gain a public image advantage over your competition.

3. Employee Health and Productivity

Many of your employees spend more of their waking hours working than doing anything else.  Their workplace has an outsized influence on their health. Commercial real estate with a LEED certification is healthier and more comfortable space to occupy, and can boost both health ratings and productivity. LEED spaces that use natural light instead of artificial light can reduce stress levels while making it easier to see and the work. LEED buildings also typically have higher indoor air quality, due to better ventilation and the use of materials that are less likely to outgas volatile organic compounds. This reduces both "building sickness" as well as the risk of having diseases travel between employees through the ventilation system.

4. Re-tenanting

If your company needs to vacate an LEED space, you'll find that it's easier to re-tenant. LEED commercial real estate property lease rates are as much as 20% above comparable non-LEED buildings. Furthermore, they also demand a significant rent premium that averages $11.33 per square foot per year relative to non-LEED buildings.

5. Recruiting and Retention

Attracting and keeping tenants from Generation Y is a significant challenge for many companies. This generation has been described as entitled, disloyal and unmotivated. However, they're also extremely tech savvy and well-educated. They're also interested in ethical concerns in business, including environmental sustainability. Having LEED-certified properties in your commercial real estate portfolio can give you a recruiting advantage over other companies, and retain workers of this fickle demographic. Given that 71% of Generation Y workers are concerned about ethical practice in business while just 56% are worried about a "cool" factor, finding LEED space may be more important than building high concept features.

Other great CRE LEED articles:

LEED Certified Buildings: The Savvy Tenant's Choice

4 Markets to Watch for LEED Certified Buildings in 2015


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Topics: LEED Commercial Real Estate,