Green noise or green value? Measuring the effects of environmental certification on office values

This study investigates the price effects of environmental certification on commercial real estate assets. It is argued that there are likely to be three main drivers of price differences between certified and noncertified buildings. These are additional occupier benefits, lower holding costs for investors and a lower risk premium. Drawing upon the CoStar database of U.S. commercial real estate assets, hedonic regression analysis is used to measure the effect of certification on both rent and price. The results suggest that, compared to buildings in the same submarkets, eco-certified buildings have both a rental and sale price premium.

Green noise or green value? Measuring the price effects of environmental certification in commercial buildings

This paper investigates the price effects of environmental certification on commercial real estate assets. It is argued that there are likely to be three main drivers of price differences between certified and non-certified buildings. First, certified buildings offer a bundle of benefits to occupiers relating to business productivity, image and occupancy costs. Second, due to these occupier benefits, certified buildings can result in higher rents and lower holding costs for investors. Third, certified buildings may require a lower risk premium. Drawing upon the CoStar database of US commercial real estate assets, hedonic regression analysis is used to measure the effect of certification on both rent and price. We first estimate the rental regression for a sample of 110 LEED and 433 Energy Star as well as several thousand benchmark buildings to compare the sample to. The results suggest that, compared to buildings in the same metropolitan region, certified buildings have a rental premium and that the more highly rated that buildings are in terms of their environmental impact, the greater the rental premium. Furthermore, based on a sample of transaction prices for 292 Energy Star and 30 LEED-certified buildings, we find price premia of 10% and 31% respectively compared to non-certified buildings in the same metropolitan area

Bahrain's Formula-1 racing circuit: energy and environmental considerations

The Bahrain International Circuit (BIC) and complex, at latitude 26.00N and longitude 51.54E, was built in 483 days and cost 150 million US$. The circuit consists of six different individual tracks with a 3.66 km outer track (involving 10 turns) and a 2.55 km inner track (having six turns). The complex has been designed to host a variety of other sporting activities. Fifty thousand spectators, including 10,500 in the main grandstand, can be accommodated simultaneously. State-of-the art on-site media and broadcast facilities are available. The noise level emitted from vehicles on the circuit during the Formula-1 event, on April 4th 2004, was acceptable and caused no physical disturbance to the fans in the VIP lounges or to scholars studying at the University of Bahrain's Shakeir Campus, which is only 1.5 km away from the circuit. The sound-intensity level (SIL) recorded on the balcony of the VIP lounge was 128 dB(A) and was 80 dB(A) inside the lounge. The calculated SIL immediately outside the lecture halls of the University of Bahrain was 70 dB(A) and 65 dB(A) within them. Thus racing at BIC can proceed without significantly disturbing the academic-learning process. The purchased electricity demand by the BIC complex peaked (at 4.5 MW) during the first Formula-1 event on April 4th 2004. The reverse-osmosis (RO) plant at the BIC provides 1000 m(3) of desalinated water per day for landscape irrigation. Renewable-energy inputs, (i.e., via solar and wind power), at the BIC could be harnessed to generate electricity for water desalination, air conditioning, lighting as well as for irrigation. If the covering of the BIC complex was covered by adhesively fixed modern photovoltaic cells, then similar to 1.2 MW of solar electricity could be generated. If two horizontal-axis, at 150 m height above the ground, three 75m bladed, wind turbines were to be installed at the BIC, then the output could reach 4 MW. Furthermore, if 10,000 Jojoba trees (a species renowned for having a low demand for water, needing only five irrigations per year in Bahrain and which remain green throughout the year) are planted near the circuit, then the local micro-climate would be improved with respect to human comfort as well as the local environment becoming cleaner.

Periodic time series modeling of environmental proxy records with guaranteed positive growth rate estimation

Identifying a periodic time-series model from environmental records, without imposing the positivity of the growth rate, does not necessarily respect the time order of the data observations. Consequently, subsequent observations, sampled in the environmental archive, can be inversed on the time axis, resulting in a non-physical signal model. In this paper an optimization technique with linear constraints on the signal model parameters is proposed that prevents time inversions. The activation conditions for this constrained optimization are based upon the physical constraint of the growth rate, namely, that it cannot take values smaller than zero. The actual constraints are defined for polynomials and first-order splines as basis functions for the nonlinear contribution in the distance-time relationship. The method is compared with an existing method that eliminates the time inversions, and its noise sensitivity is tested by means of Monte Carlo simulations. Finally, the usefulness of the method is demonstrated on the measurements of the vessel density, in a mangrove tree, Rhizophora mucronata, and the measurement of Mg/Ca ratios, in a bivalve, Mytilus trossulus.