Demonstrating the importance of criteria and sub-criteria in building assessment methods

Building assessment methods have become a popular research field since the early 1990s. An international tool which allows the assessment of buildings in all regions, taking into account differences in climates, topographies and cultures does not yet exist. This paper aims to demonstrate the importance of criteria and sub-criteria in developing a new potential building assessment method for Saudi Arabia. Recently, the awareness of sustainability has been increasing in developing countries due to high energy consumption, pollution and high carbon foot print. There is no debate that assessment criteria have an important role to identify the tool’s orientation. However, various aspects influence the criteria and sub-criteria of assessment tools such as environment, economic, social and cultural to mention but a few. The author provides an investigation on the most popular and globally used schemes: BREEAM, LEED, Green Star, CASBEE and Estidama in order to identify the effectiveness of the different aspects of the assessment criteria and the impacts of these criteria on the assessment results; that will provide a solid foundation to develop an effective sustainable assessment method for buildings in Saudi Arabia. Initial results of the investigation suggest that each country needs to develop its own assessment method in order to achieve desired results, while focusing upon the indigenous environmental, economic, social and cultural conditions. Keywords: Assessment methods, BREEAM, LEED, Green Star, CASBEE, Estidama, sustainability, sustainable buildings, Environment, Saudi Arabia.

New evidence on the green building rent and price premium

This paper investigates the effect of voluntary eco-certification on the rental and sale prices of US commercial office properties. Hedonic and logistic regressions are used to test whether there are rental and sale price premiums for LEED and Energy Star certified buildings. The results of the hedonic analysis suggest that there is a rental premium of approximately 6% for LEED and Energy Star certification. A sale price premium of approximately 35% was found for 127 price observations involving LEED rated buildings and 31% for 662 buildings involving Energy Star rated buildings. When compared to samples of similar buildings identified by a binomial logistic regression for LEED-certified buildings, the existence of a rent and sales price premium is confirmed albeit with differences regarding the magnitude of the premium. Overall, the results of this study confirm that LEED and Energy Star buildings exhibit higher rental rates and sales prices per square foot controlling for a large number of location- and property-specific factors.

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