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An Analysis of LEED Certification and Rent Effects in Existing U.S. Office Buildings

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Abstract

Leadership in Energy and Environmental Design (LEED) certification can have benefits to building owners such as cost savings from energy efficiency, and past work has also found that LEED certifications can increase rental premiums. This study examines the potential effects of LEED certification on rents in office buildings in 20 major U.S. cities from 2008 through 2012. The main regression results estimate that LEED buildings on average have rent roughly 5–8% higher than comparable non-LEED buildings; however, this difference decreases by about 3–4% points following official certification. Several checks support a reduced or unaffected premium and suggest that market saturation contributes to such an effect. Overall, the analysis implies that when comparing LEED buildings to similar non-LEED buildings, LEED certification itself does not lead to higher rents.

The original version of this chapter was revised: For detailed information please see Erratum. The erratum to this chapter is available at

https://doi.org/10.1057/978-1-137-57446-6_11

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Acknowledgements

We appreciate comments from Dr. Ed Coulson from the University of Nevada, Las Vegas, and participants at the International Association for Energy Economics (IAEE) European Energy Policy Conference in Rome, Italy, in 2014. We also thank anonymous referees for their helpful comments and questions. Any errors or omissions are our own.

Author information

Authors and Affiliations

  1. Department of Economics, Syracuse University, Syracuse, NY, USA

    Jordan Stanley

  2. Department of Economics and Business, Washington and Jefferson College, Washington, PA, USA

    Yongsheng Wang

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  1. Jordan Stanley
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  2. Yongsheng Wang
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Corresponding author

Correspondence to Jordan Stanley .

Editor information

Editors and Affiliations

  1. Merage School of Business, University of California, Irvine, Irvine, California, USA

    N. Edward Coulson

  2. Washington and Jefferson College, Washington, Pennsylvania, USA

    Yongsheng Wang

  3. Greenfield Advisors, Cartersville, Georgia, USA

    Clifford A. Lipscomb

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Stanley, J., Wang, Y. (2017). An Analysis of LEED Certification and Rent Effects in Existing U.S. Office Buildings. In: Coulson, N., Wang, Y., Lipscomb, C. (eds) Energy Efficiency and the Future of Real Estate. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-57446-6_6

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  • DOI: https://doi.org/10.1057/978-1-137-57446-6_6

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  • Publisher Name: Palgrave Macmillan, New York

  • Print ISBN: 978-1-137-57445-9

  • Online ISBN: 978-1-137-57446-6

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

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