Companies will get extra work out of employees in offices that are sustainable and thus more pleasant to work in, which should make them more expensive for tenants – but don't expect building owners to admit that.
That's the insight from a survey (PDF) by CB Richard Ellis and University of San Diego Burnham-Moores Center for Real Estate. The survey found that green buildings yielded a three-day drop in average employee sick days per year, which is worth about $1,230 a year in regained productivity.
The researchers surveyed 534 of more than 2,000 tenants in 154 green buildings across the United States, looking at sick day records and asking employees how much more productive they felt at their jobs.
Looking at those self-reported claims, the survey yielded a green building productivity premium of sorts – about $20 in extra work per worker per year for every 250 square feet of green office space, or a 4.9 percent average improvement.
The study had a lot of uncertainties attached, investment firm Cannacord Adams noted Monday. About the same number of tenants said they were no more productive as reported a productivity boost. About 10 percent said they were less productive.
Overall, management and other intangibles likely matter more than whether or not people are working in a green building, the survey noted.
Still, the survey results could be seen as a justification for the higher rents more energy-efficient buildings command, the CB Ellis/UCSD researchers said.
There is now "some evidence that there is an economic payoff to tenants who pay attention to space quality," the report stated. Energy efficiency was one factor influencing the results, but so was a more pleasant work environment associated with the more modern structures.
Various studies have linked green buildings with higher valuations, though that's also a measure of the fact that more green buildings also happen to be newer and more attractive properties.
And a host of startups and established companies are offering cleaner building materials, more efficient construction techniques, energy efficient HVAC and lighting systems and building automation software and systems to the construction industry (see A Green Building Market Overview).
All will likely welcome any evidence that justified higher valuations for green buildings, which already can squeeze 33 percent out of annual energy bills and pay itself back in a matter of years, according to some studies (see Green Building: Cheaper Than You Thought).
But green buildings also involve building owners investing in a return – cheaper power bills – that primarily accrues to tenants. Commercial office tenants may move in and out every few years or so, which makes it difficult to get them to invest in up-front costs of going green (see Green Light post).
"Tenants should be willing to pay more rent for better buildings," the report stated, "and even though most tenants won't admit to this (84% of more say "No"), we have found evidence in past studies that suggests they do pay premiums."
In fact, although tenants were loath to admit it, "Based on the results here, [these] premiums of only 5% to 10% are a bargain," the researchers concluded.
But Cannacord Adams analysts Eric Prouty and Eric Glover noted that they awaited some harder financial data linking green buildings to improved productivity before they could support that contention.
The study also concentrated on Energy Star-rated buildings, rather than those certified by the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) system, making it difficult to link LEED ratings with the productivity gains described, the analysts wrote.