Effect of LEED Ratings and Levels on Office Property Assessed and Market Values

Sofia Dermisi

Journal of Sustainable Real Estate, 2009, vol. 1, issue 1, 23-47

Abstract: This study examines the effect of Leadership in Energy and Environmental Design (LEED) ratings and certification levels on Assessed (AV) and Market Values (MV), while controlling for a property's characteristics and its location. The overall dataset was developed by combining information from CoStar Group, U.S. Green Building Council (USGBC), and local Assessors/Treasurer. The results indicate that ENERGY STAR designation increases AV and MV substantially. The effect of LEED rating/level on both of these values (AV and MV) can be differentiated based on the level of geographic aggregation. LEED-Existing Building (EB) designation at the Gold level has a strong positive effect on AV, while LEED-EB at the Silver level has a similar effect on both AV and MV. This effect is absent among all LEED-EBs, when controlling only for MSAs. LEED-New Construction at the Gold level has a strong positive effect on MV, while LEED-Core & Shell at the Gold and Silver levels almost doubles that effect on AV, when controlling for MSAs.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:taf:rsrexx:v:1:y:2009:i:1:p:23-47

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DOI: 10.1080/10835547.2009.12091789

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