LEED certification, or certification through the Leadership in Energy and Environmental Design, is a third party certification and a nationally accepted benchmark for design, construction and operation of high performance green buildings. Oh, and I should also mention that LEED buildings fetch higher rent premiums over their non-LEED competition. In fact, a study by the CoStar Group, a provider of information services to commercial real estate professionals in the UK and United States, found that “green” buildings out perform their non-green counterparts in occupancy, sales price and rental rates, and at times, by significantly wide margins.
According to the U.S. Green Building Council (USGBC), amongst those who use LEED are typically architects, real estate professionals, designers, construction and development companies, and even government branches that are building toward sustainability. While state and local governments continue to adopt LEED, many federal agencies are following suit, including the U.S. Department of Defense and the Department of Agriculture. In fact, the USGBC reports LEED projects in over 41 different countries, including
Once thought to be simply an amenity, LEED certified developments continue to show higher values, even in tougher economic times. Perhaps the increase in values for LEED designed product are a creation of the short supply of such developments, which accounts for less than 1 percent of the total US building inventory today.
According to the USGBC website, LEED rating systems are developed through an open, consensus-based process led by volunteer committees. Each committee is composed of a group of practitioners and experts representing a cross-section of the building and construction industry. The website goes on to explain that the key elements of USGBC’s consensus process include a balanced and transparent committee structure, technical advisory groups that ensure scientific consistency and rigor, opportunities for stakeholder comment and review, member ballot of new rating systems, and a fair and open appeals process.
LEED indicates a property’s overall sustainability by awarding points for just about any sustainable feature integrated into the construction and design of a development. From the design implementation and build out for electric vehicle ports in the garage, to the efficiency of lighting and plumbing fixtures used throughout the building, many factors can and do affect the certification process. It is comprised of specific programs tailored for new buildings, existing buildings and tenant build-outs, and awards different tiers of certification such as Silver, Gold, or the highest level of Platinum. Today, LEED is the industry standard rating system in discussing ‘green’ and ‘sustainable’ development, a trend bestowed upon the USGBS over the last few years.
But the push for LEED is still somewhat of a fledgling idea as it relates to residential real estate opportunities. Surprisingly,
Did the prospects buy into it? According to the reviews on several local real estate websites, most had an issue with paying more for the promise of savings down the road…even if the building was being touted as environmentally friendly. It appeared prospects would rather spend their money driving more economically and environmentally friendly fuel efficient automobiles, where the savings are much more immediate.
In the long term, however, LEED certified buildings have been proven worthy of their cost saving effectiveness. Should it catch on in residential real estate, if there are energy and operational savings in owning a LEED certified home, I believe that may be just another way to combat a recessionary environment.